Will there be a drop in housing prices?

Yep, those houses would then be owned by the banks, so banks will take a big hit. I don’t see interest rates increasing soon but there are now some new dynamics in world finance with the yen dropping making NTD drop too, USD rising and oil dropping. It is the low interest rates that have made these prices get out of country for so long, in my opinion. People couldn’t pay interest on these huge mortgages or accurate so many properties easily without these low rates.

But as other posters mentioned already it is the changes in the tax law that has had the biggest effect, its also according on online polls. The govt has two policies which is to implement realistic housing values for tax purposes and to introduce alternative minimum tax. The property tax change comes in fully in 2016.

[quote=“headhonchoII”]The housing market is broken into sectors, while affordable housing will be important for the middle class, people will buy in areas closer to the city if they can, and nearer MRT in general. So I would say Taoyuan prices will take the biggest hit.
But I would expect the really expensive luxury places in non central areas to drop the most, because who will buy them if they are empty?
I don’t see a bust here so much as a slow decline in prices. Theres no population growth to create demand, and in even in the few cities that are still growing, there is tonnes of housing available.[/quote]

Not going to happen in Taoyuan. Current housing prices are still considerably cheaper - much more affordable for the average worker - than in Xinbei City. It’s possible to pick up a flat for less than NT$150,000/ping in most areas. From this relatively low plateau, I see a steady rise in prices in Taoyuan at least until we reach the NT250,000/ping level for older flats. And prime areas like the new TRA station zones have very tightly controlled supply which isn’t likely to lead to a decrease in price anytime soon.

[quote=“chung”][quote=“headhonchoII”]The housing market is broken into sectors, while affordable housing will be important for the middle class, people will buy in areas closer to the city if they can, and nearer MRT in general. So I would say Taoyuan prices will take the biggest hit.
But I would expect the really expensive luxury places in non central areas to drop the most, because who will buy them if they are empty?
I don’t see a bust here so much as a slow decline in prices. Theres no population growth to create demand, and in even in the few cities that are still growing, there is tonnes of housing available.[/quote]

Not going to happen in Taoyuan. Current housing prices are still considerably cheaper - much more affordable for the average worker - than in Xinbei City. It’s possible to pick up a flat for less than NT$150,000/ping in most areas. From this relatively low plateau, I see a steady rise in prices in Taoyuan at least until we reach the NT250,000/ping level for older flats. And prime areas like the new TRA station zones have very tightly controlled supply which isn’t likely to lead to a decrease in price anytime soon.[/quote]

You have to define where in Taoyuan you’re talking about. Prices have risen agressively in Nankan (Luzhu) and the nearby 藝文特區 (arts district? But there’s no art there…) and out in the HSR area outside of Zhongli. I’m not sure about central Taoyuan and central Zhongli, but I assume those have gone up somewhat, too.

Nankan and Taoyuan are safe because a lot of Taipei commuters live there, but if a lot of house buying moves back into the capital, they could be in trouble. The real danger though has to be out by the HSR station. There is literally almost nothing there but houses – no shops, no supermarkets, just empty buildings where the lights don’t turn on at night because next to nobody lives there. All the buildings are brand new and rather upscale and are perfect examples of the Taiwan model of investment property. If the investments turn sour, expect those places to go super cheap. After all, they are the height of inconvenience.

Yep that’s what I meant really, overpriced places that are not in a ‘good living circle’ as Taiwanese like to call them. The HSR areas are not going to be a success unfortunately. I bet that the aerotropolis plan will be cancelled. Linkou has good access and better laid out so I’d say that will remain fairly popular.
In the end pretty much everywhere should have a reduction in price in the North as far as I can tell, it’s just how much is the question. There’s no real population growth to drive demand and there’s a surplus of housing all around the counties. Maybe Keelung will get more popular if they ever fix it up and put the MRT in.

[quote=“headhonchoII”]Yep that’s what I meant really, overpriced places that are not in a ‘good living circle’ as Taiwanese like to call them. The HSR areas are not going to be a success unfortunately. I bet that the aerotropolis plan will be cancelled. Linkou has good access and better laid out so I’d say that will remain fairly popular.
In the end pretty much everywhere should have a reduction in price in the North as far as I can tell, it’s just how much is the question. There’s no real population growth to drive demand and there’s a surplus of housing all around the counties. Maybe Keelung (Jilong) will get more popular if they ever fix it up and put the MRT in.[/quote]
Did they expect people to take the HSR everyday to work? :ponder:

The percentage ratio of empty flats are not a good predictor of house price movements. It has in the 19 years I have called Taiwan home never been below 13%.

I would not know what amount of building in Taoyuan is due to the Taipei commuters, however I would think that dropping prices in Taipei and Xinbei would lessen demand in Taoyuan.

[quote=“Belgian Pie”]
Did they expect people to take the HSR everyday to work? :ponder:[/quote]

Interestingly enough, I have a coworker that does this every day: Taoyuan > Taipei > Taoyuan. There are passes that offer better pricing if you frequently take the HSR.

Taking the HSR to work would be sweet, but few will do that in Taiwan because those places don’t have any other reason to live there and there’s not many well off executive types. Taipei is not HK, besides those people still wouldn’t live in the boondocks. Apt prices in places like Bade and Taishan are going to get massacred.

[quote=“rocky raccoon”][quote=“Belgian Pie”]
Did they expect people to take the HSR everyday to work? :ponder:[/quote]

Interestingly enough, I have a coworker that does this every day: Taoyuan > Taipei > Taoyuan. There are passes that offer better pricing if you frequently take the HSR.[/quote]

It’s probably cheaper than purchasing and maintaining a car.

Yeah but with a car you can actually go to places in Taoyuan county, otherwise you are stuck. I would consider taking the HSR to work everyday IF there was a beautiful suburb to commute from, unfortunately there isn’t one! If there was a fast rail link from Ilan that would be perfect. The one hr+ commute by ziqiang is more than I would like to do.

BTW, there must be a lot of Xindian/Yilan commuters. The bus line from Xindian to Yilan is empty Monday to Friday, but come weekend, every busload is filled to the brim, and there is brisky service. I am most tempted to hop on and check it out.

[quote=“headhonchoII”]Yep that’s what I meant really, overpriced places that are not in a ‘good living circle’ as Taiwanese like to call them. The HSR areas are not going to be a success unfortunately. I bet that the aerotropolis plan will be cancelled. Linkou has good access and better laid out so I’d say that will remain fairly popular.
[/quote]

Linkou doesn’t have any shopping, whereas Chingpu has the soon to open outlet mall, Metrowalk, Costco, and a direct train line to Zhongli Sogo. Even without the Aerotropolis, I think the new MRT opens lots of new investment possibilities for the area round the Taoyuan HSR. It’s hard to predict how places will develop, but with its steady growth in population and employment, Taoyuan, at least to my mind, is one of the safer long term investments in the real estate market.

metrowalk.com.tw/web/index.html
gloriaoutlets.com/?l=en&p=project

Ah but Taoyuan city and county is massive, of course places near the MRT line should be more popular, but depends how much prices already
ran up I guess. I don’t think people will be rushing to live outside of Taoyuan city or developed areas. Development cannot be spread out everywhere.
zhongli Sogo area ain’t bad, surprisingly, but most of Taoyuan and Zhongli is still a dump. But that’s Taiwan urban environments for ya.
metro walk is a nice mall, was there recently, it’s been around a longtime already though and you need to drive out to it.

[quote=“Blaquesmith”]

What did I just say?

Taipei value will always be more expensive, but right now, the prices are MUCH higher. Since they are overinflated, the prices can fall a lot and still be higher that in the surrounding areas. This is how it works.

Read my previous posts in this thread if you need more info on the context I’m basing my affirmations on.[/quote]

You are still wrong.

Bigger flats will be the one seeing their ratio price/ping lower the most. Smaller price will always be better value as they will be more affordable (as a whole) and in line with the demographic trend in taipei (single or couple with no kids). Smaller flats are also easier to rent.

They are weekenders I think, take the bus to Luodong, visit the beautiful sports park and night market or stay overnight in a nice guesthouse or visit Suao, the bus is cheap and comfortable and takes less than an hour usually. Great and easy day trip from Xindian! I would love to commute from
Luodong everyday if it was a bit closer. Looks like heaven compared to the gritty west coast. All the restaurants are cheap too, and rent must be a pittance.

[quote=“chung”][quote=“headhonchoII”]Yep that’s what I meant really, overpriced places that are not in a ‘good living circle’ as Taiwanese like to call them. The HSR areas are not going to be a success unfortunately. I bet that the aerotropolis plan will be cancelled. Linkou has good access and better laid out so I’d say that will remain fairly popular.
[/quote]

Linkou doesn’t have any shopping, whereas Chingpu has the soon to open outlet mall, Metrowalk, Costco, and a direct train line to Zhongli Sogo. Even without the Aerotropolis, I think the new MRT opens lots of new investment possibilities for the area round the Taoyuan HSR. It’s hard to predict how places will develop, but with its steady growth in population and employment, Taoyuan, at least to my mind, is one of the safer long term investments in the real estate market.

metrowalk.com.tw/web/index.html
gloriaoutlets.com/?l=en&p=project[/quote]

That means that the mom and pop construction companies are hopefully shortly not putting up their small eyesores in the area. i recall that you remarked on that during a drive through the area a decade ago.

Time flies. I would buy in there as an investment, however only after the current bubble burst has worked its way through the system.

I forgot to add:

Taipei’s value will always remain higher than new taipei. So yes "as a whole, if prices go down the total lost will be greater but you shouldn’t think that way. otherwise you should buy yourself a house in the mountain and when it’s been wiped by a typhoon you can be glad you “only” lost 1M$.

Fact is, if prices in taipei are to drop, then prices in new Taipei will be in free fall.

[quote=“Markova”][quote=“Blaquesmith”]

What did I just say?

Taipei value will always be more expensive, but right now, the prices are MUCH higher. Since they are overinflated, the prices can fall a lot and still be higher that in the surrounding areas. This is how it works.

Read my previous posts in this thread if you need more info on the context I’m basing my affirmations on.[/quote]

You are still wrong.

Bigger flats will be the one seeing their ratio price/ping lower the most. Smaller price will always be better value as they will be more affordable (as a whole) and in line with the demographic trend in taipei (single or couple with no kids). Smaller flats are also easier to rent.[/quote]

That sounds OK but I wonder if the fact that the buyers -or main customers, focus of the market- have not been the people with children but big fat cat investors will change when the going gets tough. I mean, we had the older generation with money, who practically jump at the first opportunity to buy any flat anywhere, allegedly “for their children”. But those children will not have the same power to buy places, anywhere at all. And the generation afterwards even worse. Not because there are no flats available, but because those flats are priced beyond their range or bought by big fat investors. How can this change?

I discussed this with one of my colleagues over lunch and she’s in that exact situation. She just bought a NT$30 million place in Nei Hu, put 50% down and got a loan from the bank for the other $15 million. Not sure how long the mortgage is for, but it’s at a variable interest rate. The payment is NT$80k/month.

That’s insane if not a high earner with good prospects. How much is her income roughly?