The older ones can afford to just hold on if they don’t get the price they want as they paid in cash.
If the bubble bursts it will be when this group dies off and the kids want to cash out. If enough of these mosquito homes hit the market at one time it should crash as the kids will take whatever they can get.
I don’t think desirable places like Xinyi will go down in price because location, location, location.
Prices can decrease in near future, only when the FED raise up interest rate further and people can make like 6 - 7% with usd accounts. If we see massive capital inflows to usd
Most foreigners in Taiwan misunderstands local real estate situation. Including myself. Just cause prices are high and expensive, doesn’t mean market is in the bubble. No one is really over leveraged. People put 30% down and families help a lot with cash. Is totally different situation vs Japan in 90s, where everything was over-leveraged.
A lot of money from Taiwanese abroad entered local real estate market and is parked there for good.
Only drastic situation can decrease prices like war, drastic local interest rate hikes, massive taxes. We won’t see it. Taiwanese like it, this way. Olders have feeling of wealth, youngster are scared and humble, politicians own apartments too. Don’t forget semiconductors grows like 8% per year. In takes just a bit of extra positive cash flow to pump prices further.
I rent in Germany, but in Taiwan would buy. Somewhere outside of Taipei. Take 40 year loan and call it a day.
As I keep telling people. A city does not make a country and market conditions vary not just from city to city but from neighbourhood to neighbourhood.
Why can’t it be? I replaced my rent with something very similar in a mortgage.
except that this isn’t true in many of Taiwan’s markets. It entirely depends on where you want to buy.
Sounds like sensationalism.
The sense is in doing your homework and finding out if it’s right for you.
Not always true.
There are lots of reasons to buy though. If mum’s going to help finance the down payment, you’d be nuts not to. Why keep renting and making others rich?
Sure, hard to disagree, but there are many practical places where one can buy.
Doubtful.
Plus the mindset in Taiwan is to own property and build wealth. Even the young people buy into that philosophy. Ask most young people about the stock market and most people do not invest in it. So either you buy a home or hold cash at 0.5% interest rate if that.
Really? Loads of my students invest.
All my students didn’t. Maybe an unusual cross section that I taught.
I asked and everyone either had no idea or they thought it was dangerous.
Also here.
https://pip.moi.gov.tw/Eng/EP36.aspx
Insanely low rates which accounts for the insanely high price of property versus earnings and population growth in a lot of the island.
My uni has a big business department, so maybe that accounts for the difference.
Was looking at rentals in AoZhiDi and other places recently down South. Spacious luxury apartments renting out at 30k-40k/mth. Those owners are very unlikely to make a profit from now on, if they bought a few years ago maybe they have capital appreciation but the mortgage must be 2-3x that at least. I really don’t know why anybody would buy one now , except for the school access, there are loads and loads of rentals and apartments to buy.
I think a lot of this is driven by huji and trying to live in the right catchment area for schools, apart from the marriage aspect.
Yep a lot of people do live ‘poor’ with their shitty 20th century motor scooters.
I do wonder if shit in taiwan is about to go splat. The price of housing compared to the average salary is disgusting. Plus in Taiwan a very few elite keep buying up houses, willing to bet its a giant money laundering scheme or something. Buying up properties to let spiders sit there in and the cherry on top a potential war zone? say what ?
Taiwan keeps doing this shit and china will just walk in because what the fuck is there to fight for? to keep the rich fuckers in business? protect their property value while im left with shit? yeh fuck that. Taiwan needs to create a sense of parity in the housing market, it’s a massive problem.
unfortunately I also don’t think it will pop anytime soon. I think in the USA the shit would never fly, people won’t sacrifice their lifestyle to keep being house poor, people in Taiwan will eat piss and shit to pay mortgages because it’s the only thing allowing people to find a potential partner.
Being Taiwanese sounds rough unless you’re a mommy and daddy boy. Then you can just tattoo yourself head to toe and work at the club for the rest of your life.
I think you’re misunderstanding what can lead to a bubble to pop. 2008 was based on over-leveraging, but that doesn’t mean all bubbles burst because of mass irresponsible borrowing. See also [Tulip mania - Wikipedia]. Basically, you need only a glut of something (like the current younger generation selling off their parents’ properties en masse, a not unlikely possibility in the next 20-30 years), or for enough Taiwanese to take their real estate investments elsewhere (like the US) and sell off their mosquito houses in Taiwan. The property bubble almost certainly will not burst here due to insolvency alone (though so many people are paying 100% of one of two spouses incomes to their homes, so raised interest rates could spark a mass sell-off)
Property/land has been a very long tulip mania. Crashes happen, but long term it’s very different.
Most bubble burst cause of over leverage and when excess liquidity shrinks. Ofc this comes with change of vibe, which will die hard in Taiwan.
They have like 100 years of growth in real estate. They fanatically believe in it. I agree can happen 2055 when demographics factor really come into play and we have generation mentality change. By than nominally we can have another 100 - 400% increase in prices. Currency loses value over time. What about if South East Asians will be allowed to integrate in Taiwan?
How would I play in this market? Let in law put their cash in it hehe. I don’t know look for somekind of deal, where rent can cover my mortgages. Buy 2 super small studios outside of Taipei and hopefully rent can be 80 % of mortgage. and personally rent in good location where rent is 1/4 of mortgage. Or buy near mountains for myself.
You can always adjust and should take an opportunity of cheap secured debt. Yes market is expensive, so you have to look harder for good deal
You don’t just buy property to save on rent. You also need to factor in the capital appreciation. I’ve been here for almost 20 years and the whole time, sceptics have been saying that the bubble is going to burst. Prices are still going up though and seemingly no end in sight. The little place I bought in Xinbei has more than tripled in 16 years.
Or capital depreciation.
Well, my point is that this generally hasn’t been happening in the past 20 years.
“Past performance is no guarantee of future results” ~ every investment advisor that shouldn’t be locked up in prison ever