House prices in Kaohsiung: are we in a bubble?

Hi,

I came to Taiwan for the first time last month with my taiwanese wife (I’m italian) and fell in love with it. So now we are planning to buy a new house, so we are checking a few of the new buildings here. They are really beautiful and I’m amazed by the architecture and functions (pool, gym, common areas).

We are really interested in some of them, and looking at some small properties, ex: 57 sm for 9.5 m TWD.

However, the locals advised us to not buy it now, and wait because prices are going to go down 60% in the near future.
Is it true that the house prices are going down, are we really in a bubble in Taiwan?

I checked the house price index of Taiwan and this is the situation:

Considering the new TSMC plant, new businesses opening, the tourism coming back, crazy inflation, can we really say that in Taiwan, or more specifically in Kaohsiung, we are in a bubble?

I have been waiting for prices to go down since 2011…still waiting. Dont count on the bubble deflating any time soon.

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:thinking:

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If there is any property in a suitable location, buy it. If there’s an immediate market correction, it will be corrected in 5-10 years

What reason did all these people give that house prices in Kaohsuing will go down by 60%? I’m not an expert on the housing market situation in Taiwan by any means, but I don’t see this happening for the reasons you listed and others. Presumably all these people gave you a reason for why they’re expecting this?

There is a difference between buying a home as a place to live vs. buying as an investment.

If you buy a place to live, corrections in value (“bursting bubbles”) are less of an issue compared to when you buy the home as an investment (all given that you can keep up with the payments).

Sometime in the next three to 75 years, housing prices across Taiwan may or may not go down.

The reason I have been saying Taiwan is in a bubble (for the past 8 years or so) is that the cost of rent is about half what the cost of a mortgage payment would be (after putting 30% down). I have seen the exact same unit in Taipei on the market for what 591找房 says would be a monthly payment of 80-90,000/month (after putting 30% down!), also on 591 找房 for monthly rent of 42,000. Not a similar unit with better/worse appliances/design in the same building. The exact same unit. To me, that indicates that a correction is in order. But that’s been going on everywhere in Taiwan and for a very long time. Somehow, landlords don’t care that they are maybe making half of their monthly mortgage payments from their rent. A lot of that comes from inherited land that is already owned out right, which means Taiwan has the opposite of sub prime loans going on.

What I would say is that if you have the money and you’re looking for a place to live, by all means buy now. You will need a place to live. Assuming you don’t buy property in some place with ridiculous HOA restrictions, you will have a space that is yours that you can make work for your needs. If you own, you aren’t at the whim of your landlord doing whatever batshit crazy things we have all listed here about our landlords. Yeah, the day may come where the housing prices are in line with what makes sense based on common sense market dynamics (by which I mean the prices come down), but in that time you will have been making mortgage payments and solving your own problems instead of putting up with slumlords.

On the other hand, if the payments will be a stretch and you don’t have much financial cushion, it doesn’t hurt to rent for a while. I’ll be renting forever, because I live in Taipei and it would cost me far more than my entire lifetime to buy property like the one I’m renting at the same price I’m paying right now.

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Are you willing to stand behind such a bold prediction? :thinking:

I’ll bet my entire life savings on it.

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This is good advice, given that the OP has only been here a month. Let the novelty wear off a bit before jumping into a mortgage, and look around to make sure you like Kaohsiung more than, say, Tainan and that you know where in K-town you want to settle

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Taiwanese property just doesnt obey the rules of abywhere else. Just buy what you like and can afford and enjoy. Make sure your name is on the property somehow.

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Where do you and wife want to live? There are still extremely cheap (versus Taipei/New Taipei City) districts in Kaohsiung. Luckily, the missus bought nearly at the bottom of this last trough (around 2017/2018), hitting it just right, after selling the property in Taipei. She basically sold a 30-year old place with no elevator and got a 10-year old place with elevator at about 1/5 the cost, per Ping, in a very nice district. Quite this arbitrage, many people in the north should consider doing the same if want to expand their nest egg.

So, I suggest you look at all the districts and maybe at 10-18 year old apartments. The expensive districts are Zuoying and near the Arts Museum.
I guarantee you can still find a cheap place, it’s all about where you are willing to live in Kaohsiung. It’s MRT and light-rail system is now extremely convenient.

Good luck and PM if you have specific questions on Kaohsiung.

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The area would be Fengshan, we are looking for a newly built house. With all the amenities such as shared gym, pool, common rooms etc. We already looked at some places, one of the latest is the Midtown building complex and that is more or less what we are looking for. As you can see from the listing, the price in that area already increased 33% in just one year!

The offer is however huge, with new buildings being finished every month.

So, for now we just found a 50 square meters apartment to rent in a similar building just built for just 700 euro a month, gym and several common areas. We gonna sign a 1 year contract tomorrow and then we will decide in the coming months/years for a purchase while looking for the housing market prices trends.

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That’s not true.

This is unbelievably untrue to just paint the whole country with one brush, of which is not one market, but many smaller markets.

What you are saying rings true in Taipei proper and Kaohsiung’s core at most.

Yeah, in Taipei. Not the case in other places. We live in Taiwan, not Chinese Taipei.

This country is more than just Taipei.

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That website is a joke. If you look for the “house price index” of other countries on that website you’d see every country follows the same trajectory.

If newly-built, you will pay a premium of like 20-30%, basically you are paying the profit margin of the builder/construction firm. Would not recommend buying anything new unseen/unbuilt. Anything can happen between signing contract and when you move in (like shoddy construction, water pipe problems, leaking, etc.). Buy used, even if 5 years old, as any leaks in the walls should show up by then after inspection by a good waterproof firm (for buildings). Wife has had plenty of experience in that.

On a side note, the place we got in Kaohsiung we were able to haggle about 20-25% off the listing price. You generally cannot really haggle for these “not-yet-built” buildings, but you can with all others. Cut 25% off listing (through an agent) and see if seller comes back with counter-offer. Nearly all Taiwanese list their buildings for sale at the top of the current market range. We did with our Taipei place, and final price was of course lower. It’s common practice.

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About 3x the cost of rent in my case last time I checked.

Again. Your case is not all of Taiwan.

Taiwan is made up of many different markets.

People were telling me in 2010 it was going to crash. I waited.

Narriator: it didn’t crash *

  • *Past performance may not predict future performance
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This means a higher monthly fee. Also, make sure you own the parking because in some buildings they make you rent that.