Taipei housing likely to remain unaffordable for youth: expert
By John Liu, The China Post
July 12, 2014, 12:01 am TWN
While Taipei City Deputy Mayor Chang Chin-oh (張金鶚) announced his goal to bring down Taipei's housing prices by 30 percent, real estate company DTZ General Manager Billy Yen (顏炳立) maintained that prices would still be too high for young people in Taiwan to afford.
Chang, a former real estate professor at the National Chengchi University, said in a recent meeting that he would like to see Taipei's real estate prices fall to a reasonable price range, namely by 30 percent within two years.
Should this happen, housing prices will still be too expensive to purchase, Yen said, pointing out that "Taipei is not your home" to young people. He argued that the government should construct more social housing, which can be rented out to young people.
Since the government already has set out to lower property prices, locals will adopt a wait-and-see stance concerning prices. "Everyone is waiting," Yen said.
Prices Will Come Down
The government had tried to lower housing prices before, which resulted in fewer transactions instead of lower prices, Yen pointed out.
However, Yen stressed that "there are no markets immune to suppressing measures." Property prices in Hong Kong and Singapore have come down, and Taiwan will be no exception, Yen said.
Yen believes that the housing price will decline over time in Taiwan. He used the analogy of "boiling frog" to describe the government's measures to lower housing prices. He maintained that he was giving a factual description of Taiwan's real estate market, without adding personal views.
The government rolled out various measures, such as placing a limit on allowed mortgage amounts, and levying various levels of tax on different upscale apartments.
Upscale Apartments Became Less Popular in Kaohsiung
With the government rolling out measures to "hit houses" as the measure is referred to locally in Chinese, home viewings by potential buyers have dropped substantially in Kaohsiung.
Upscale and larger apartments used to attract 50 visits from interested parties per week. But the number was reduced by nearly half in the past month.
Apartments priced above NT$40 million are usually located in nicer areas, and as such, tend to keep their higher price tags. Nevertheless, visits by potential buyers dropped by 10 percent.
Real estate brokers said investors have moved their money from the housing market into the stock market, which has seen better performance recently.