Land in taiwan is only going to get more expensive

Business Money
1

cos land in taiwan is pretty limited in respect to its population… do you know that taiwan’s population density is like the 2nd highest in the world!..

compared to land in china or india… i think the prices of land in those two huge continents will remain stable or even fall in the more rural remote areas…

yeah china and india have pretty huge populations but most people prefer to stick to the huge cities and very few decide to live as hermits or farmers in the more remote rural areas…

what do you think?

2

Taiwan also has a negative population growth rate.

3

And a lot of silt that needs to go somewhere.

4

Land prices will keep on skyrocketing due to speculation, not population growth. Plenty of mosquito halls and crumbling hellholes attest to that fact.

5

Don’t count on it. All it would take would be some sort of minor economic catastrophe that lead interest rates to increase or people to default on their loans for some other reason and the bubble would pop in spectacular fashion.

6

Depends on credit growth and low tax on property speculation more than anything…

7

But the problem is that … we have all been talking about this miraculous or doomsday economic catastrophe (depending on which side of the coin you are on) for ages! and not only in this country too… yet the bubble hasn’t been popped in spectacular fashion … yet…

I remember this hoolah over the bankruptcy cases in the US a couple of years ago and people were being thrown out on the streets and yet if I am not wrong, there weren’t any property bubble bursts in the US…

8

crystaleye: Huh? Just off the top of my head, Miami.

http://www.jparsons.net/housingbubble/miami.html

It won’t let me post that graph in here, but look at the graph just a little way down that page.

Here’s Las Vegas:

http://www.jparsons.net/housingbubble/las_vegas.html

Phoenix:

http://www.jparsons.net/housingbubble/phoenix.html

LA:

http://www.jparsons.net/housingbubble/los_angeles.html

In fact, you can find a whole lot of them here (if you scroll down a bit):

http://www.jparsons.net/housingbubble/

With the exception of Portland, Maine and Washington, DC, they’re all showing that in the past 8-10 years, housing has essentially gone nowhere or down.

9

Anyone who has been through the housing market crash in the UK in the 90s knows what ‘safe as houses’ REALLY means.

10

Try being from Ireland…a lot worse!

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103

11

[quote=“GuyInTaiwan”]crystaleye: Huh? Just off the top of my head, Miami.

http://www.jparsons.net/housingbubble/miami.html

It won’t let me post that graph in here, but look at the graph just a little way down that page.

Here’s Las Vegas:

http://www.jparsons.net/housingbubble/las_vegas.html

Phoenix:

http://www.jparsons.net/housingbubble/phoenix.html

LA:

http://www.jparsons.net/housingbubble/los_angeles.html

In fact, you can find a whole lot of them here (if you scroll down a bit):

http://www.jparsons.net/housingbubble/

With the exception of Portland, Maine and Washington, DC, they’re all showing that in the past 8-10 years, housing has essentially gone nowhere or down.[/quote]

in those areas which you pointed out, there is a slow upwards creep of housing prices… then in the years 2000-2008, there is this huge deviant spike in housing prices followed by an immediate crashing of housing prices back to the normal upwards flow of housing prices…

it is by no means a property bubble burst … not in my dictionary anyway… more like a re-adjustment of housing prices back to the normal trends… a real property bubble burst in my opinion would means a near zero valuation of properties aka the 1930s Great Depression… or at least a huge inverse downwards spike of property prices…

but my scenario would never happen in today’s world of active government… otherwise there might be a massive spike in suicide rates… lol!..

12

This is true but it is also true that prices are liable to fall, too. Also, due to speculation not population growth, like you say.

The price of land is a symptom of the systematic miss-management of the economy. The causes are private land ownership and unfair taxes on natural economic activity (such as buying and selling).

13

No government can stop a property crash when a bubble gets too big, in fact it’s when they try to manage the property market and prevent prices dropping they often make it worse in the end.

14

crystal: No. A bubble bursting does not imply a near zero valuation, although it’s interesting you should mention that, as I will discuss below.

The property prices have not returned to the overall trend for most people. The key is obviously, timing. Yes, if you bought the house twenty years ago, you’re basically fine. Things have indeed returned to the long term trend.

What, if like a great many people, you bought your house within the past ten years? Those people are back at (or below) where they were a decade ago. This effectively means that the past ten years basically didn’t happen. Except that they did, so people actually went backwards relative to inflation. Of course, if you bought your house five years ago, then you’re really screwed because then you’re probably underwater. For such people they’re actually even worse off than a zero valuation unless they can just walk away from the debt obligation (though I’m sure their credit score, and maybe even chances of getting decent jobs, somewhere to rent, etc. would be shot to pieces).

Some of those people really were involved in speculation. Others were people who weren’t flipping houses or any such thing. Generally, I’m inclined to say such people are stupid, so fuck 'em, but probably from their point of view, they thought they were going to be priced out of the market and would never get their foot on the ladder. This is not helped, in my opinion, by the way various vested interests in different countries (the real estate industry, banks, even government, who have a massive conflict of interest in both manipulating land release, building codes, property tax incentives/disincentives and promoting home ownership) created massive fear about getting in now before it was too late. This was/is a massive problem in Australia. There are tons and tons of young people who really believe that if they don’t get in now, they’re going to be screwed. When it all turns to shit and the music stops (as it will at some point in Australia), there’s going to be a fairly large percentage of Generation Y left with no chair and the carnage – in the words of Jesse Ventura – is going to make Cambodia look like Kansas.

It’s actually in no one’s real interests to have economic instability like this because it can, and often does, lead to political instability and can get out of hand. Having massive numbers of people who have essentially fallen off the cart and have no real stake in society (through property ownership) through middle class living standards and social mores is a recipe for disaster. So, as much as I say, fuck 'em, it wouldn’t be good if large numbers of people were, in fact, fucked. I mean, look at these Tea Party yahoos. Would they have occurred during any economic good times? What if things don’t improve in America? What about if/when America loses its top dog position? These clowns are only going to grow in number and power, and their views on a whole grab bag of issues are only going to get more extreme.

15

Negative equity is the fear as you cannot sell your house in most cases. Negative equity will affect people who bought in the last few years of any bubble. People who bought in inconvenient places with little employment will lose the most as will people who invested in multiple properties who need to pay the mortgage interest. Taiwan still has a strong manufacturing industry and strong foreign currency reserves but a bust would still potentially leave a lot more people unemployed here and some banks may also go bankrupt.

I’ve been following the Australian situation and the bust is just starting there and will accelerate sharply by next year. Australia is going to be in real trouble even with it’s mining revenue counted in as it has almost no industry due left these days.

16

HH: A while back, one of my friends (who is massively into investing) was looking into shorting certain Australian banks, namely Westpac. He thinks it’s going to get very ugly there. If the wheels come off China, then Australia is going to be completely fucked. I think a lot of people in Australia had a bit of a chuckle about “dumb, greedy Americans” but will be laughing on the other sides of their faces in short order.

In terms of Taiwan, I would be extremely interested to see figures (broken down by age) on things like personal debt, savings rates, and so on. I know, obviously, that young people have much different income and spending patterns, but I have a whiff of there being quite a generational change here with respect to how people handle money.

17

Taiwan is a lot more complicated but I too would like to know more about the statistics. Generally personal credit is tighter to access here after the early 2000s ‘ka zhai’ problem, banks can take a big write-down on credit card debt so they are much more careful now, it’s actually quite a good system they worked out here after that.

As for mortgages, it gets complicated in Taiwan because a lot of families pitch in for their sons and daughters when they get married. There are a lot of banks in Taiwan and although they may have got looser with lending over the last couple of years it’s again my impression they are not as profligate as the West, most banks in Taiwan are owned by rich families and they have a lot to lose personally by over-stretching themselves.

They probably will take a bath though when the luxury apartment and investor in the 'burbs market bombs, it may not bomb now or even next year but it will eventually. The government is doing all it can to keep it going with their 30 years, 3% interest loans but it’s just going to make the correction worse in the end. Taiwan is not as weak fiscally as most Western governments and levels of personal saving are fairly high so I expect it to be a problem when it busts but not a game changer.

18

So, the G’ment has a plan to start building -now, or in the following years- “low” cost apartments. Some are in the boondocks, other in Linkou, Sanchong -heavily populated, areas, and I just noticed this:

[quote]The government has changed the location of a batch of “modernity apartments” it plans to build from Sanxia District to Xindian District, both in New Taipei City, the Council for Economic Planning and Development (CEPD) said.
Modernity apartments are low-price residential units offered at about 50 to 60 percent of market value. Buyers, however, do not own the apartments. Instead they purchase the right to live in the apartments for a period of 70 years.
…
The CEPD had originally planned to build two batches of apartments, one in Tucheng District near the future MRT Dingpu Station; and one in Sanxia, near the Sanxia Education Research Center.

However, since the completion of a Sanxia MRT Line is nowhere in sight, the CEPD has decided to change the location of the apartments to Xindian, near the MRT Qizhang Station, situated pretty much at the heart of Xindian District surrounded with shops, restaurants, multinational corporations, a hypermarket and plenty of old and new houses.

Yulon Motor and HTC, two of Taiwan’s benchmark corporations, have their headquarters in the area. One of the island’s biggest Carrefour outlets is also there.

Due to the popularity of the location, new apartments are offered at around NT$500,000 a ping, or 3.3 square meters. At a discount of about 50 percent, the modernity apartments will be the least expensive new apartments in the area.

[/quote]
chinapost.com.tw/taiwan-busi … shifts.htm

Please note that the location is right where you have other massive complexes about to be finished, like MeiHeSu -about 3000 units- or JadeGarden -1000 units- and so on. It is already receiving the full blast of commuters from the mountain residents plus other major complezes already in existence -the most prominent being the one on top of Qizhang station itself, famous for being so much trouble the developing company played a Houdini and simply dissappeared.

Normal average prices in the area go for 800K up per ping. Who wants to bet that with news of the new developments prices will now shoot over the one million mark? They are already like that where I live, two stations down: 26 ping old homes go for 2 million or more. Rents for 20 to 35K for that space.

And I do not see this going Kaboom! any time soon…

19

Dapinglin is a bit of a special case as it will be a transfer station for the circle line in the future, plus it’s near the Xindian river. But the rest of Xindian is getting really expensive too like you say and it’s also getting really crowded. So getting much more crowded but more expensive, doesn’t really compute eh. Xindian used to be the place people moved to to get away from Taipei City, soon they’ll be moving to Taipei City to get away from Xindian :slight_smile: . North Taiwan is just one giant urban jungle.

I’m just looking at that link you posted Icon. I’m always very suspicious when the government changes a scheme so much. I wonder what was the reasoning. I think Sanxia already has many empty apartments so they thought they will have trouble shifting these affordable apartments. More likely is the developer can make more money off each unit somehow. 500,000 NTD/ping, at 30 ping that’s 15,000,000 NTD, they are just playing games in my book. Only wealthier people in Taiwan can afford to purchase this.
To compare the apartment I live in now in Taichung in an area similar enough to Xindian in amenities (okay it doesn’t have an MRT) could be bought for 4,000,000 NTD.

20

Don’t start me on Tapinglin. Last night we had a neighborhood meeting because the other day an MRT dig left us all without power for 9 hours. It was an accident that almost killed the elderly residents stuck in hot apartments without power for their breathing machines. Restaurants in the area lost their Sunday bought goods for the week. People were very upset as they want not a reimburse but the MRT company to show some responsibility, give them faith that, if in the 5 years we still have left, they clip our homes with a crane or hit a gas line, they’ll be responsible. Alas, all they have done up to now is change the man in charge of the dig and apologize profusely.

You would think that under these conditions, rents or homes -don’t wanna think what those vibrations are doing for the foundations of 30 year old buildings- would be lower.

And definitively, if I move, it’ll be back to the city. Wanhua/Hsimentin is looking good, really. I need someplace close to His Handsomeness.