Taiwanese media say that Real Estate in Taipei is so expensive and houses for sale in Taipei are beneficial that the common family would have to “neither eat nor drink” for over fifteen years to own a place. They use this statistic to justify the high costs of housing and the challenge of obtaining homeownership. Skyrocketing rates have also made home a state issue. Reasonable housing solutions are continually under discussion and, due to opposition from various interest clubs, making slow growth.
Expensive: According to a related survey done by DIHAS (Demographia International Housing Affordability Survey), the ratio is 17 for Hong Kong, two of the most unaffordable towns in the world, with London at 8.5 and San Francisco at 9.2.
This performs Taipei between the most unaffordable houses for sale in the world. The common home in Taipei has to pay two-thirds of its income for a contract, which is far above 30 %, which is considered the affordable limit.
Presenting factors: This is the third important jump in home prices since the 1970s oil crises. The first jump was due to the expansion caused by rising oil prices. The second jump, in the late 1980s, was mostly due to active financial liberalization.
Financial deregulation and active gratitude for Taiwan’s currency brought a flood of international capital. Extreme savings and low-interest rates made a large supply of money that made real estate speculation.
Savings: Excessive savings is one portion but compared to the other housing surge in the 1980s, this time the growth has happened more from business and company savings rather than general household savings.
Through the third jump, the normal real estate’s investment rate has been decreasing, particularly among low-to-middle income households, showing that third loop theorists are more prosperous than their earlier matches.
Investment: Housing has also been recognized as a great investment and a default method for households to put the value as their wealth rises because sharp declines in housing prices are mostly unknown. During economic slumps, such as the Asian financial crisis in 1997, the 9/11 event in 2001, the government provided additional funds for low-interest mortgages.
The effects on Taipei’s economy: Meditation has increased social differences and the number of the superrich. Buying property has been a sought-after street to park money for rich people across the world. In Taiwan especially, the profit from buying in real estate is very attractive and has grown a fast way to gain wealth.
The speed of this increase beats Japan and is getting close to that of South Korea and Singapore. Among the top five wealthiest people, two of them are in the real estate. Wealth in Taipei is increasingly reliant on property gains from the houses for the sale market sooner than real production.
Low tax rate in Real Estate in Taipei: The percentage of the vacant house for sale is beautiful, as well as its skyrocketing value. These three different features can co-exist because of very low taxes.
Low real estate business taxes supports investing in housing, while low property tax reduces the cost of maintaining the property. It is quite surprising that the annual tax on owning a car is much more important than the tax on owning property. As a result, it can be treated like goods in storage.