Real estate in Kaohsiung

Hello, I’ve been looking around to get a better understanding of the real estate market here in Kaohsiung. Other than nightly browsing on sale.591.com.tw does anyone know of any better site? Is it pretty much the same as the US version of redfin.com?

How’s the art gallery area vs 農16 vs the area by the pier? This is tough when you’ve only been here for 2 weeks :neutral:

Any input is appreciated!

I live in the Art Museum area and it’s nice. It’s more expensive and it isn’t within walking distance of the MRT but it’s quieter, the buildings are newer (some cheap construction though) and it’s not depressingly ugly. I have no idea what other areas you are talking about since those aren’t common names. Perhaps the area by the pier is the Love River area near Wufu?

Imo find a job first and then find an apt that is conveniently located to that. I would lose my mind commuting 30 plus minutes each way in the heat and traffic. I can walk to my school in 15-20 mins.

My question is why you’d want to buy when it’s much more cost effective to rent… at least that’s the case up here in the north. I could rent this tiny studio (套房) which isn’t big enough for a family for NT$11k a month, or I could buy for NT$6m – NT$1,333 a month for 30 years assuming I have enough to pay a 20% down payment. Considering I don’t know where I’ll be in 30 years and will likely have a family, the choice is obvious.

[quote=“Abacus”]I live in the Art Museum area and it’s nice. It’s more expensive and it isn’t within walking distance of the MRT but it’s quieter, the buildings are newer (some cheap construction though) and it’s not depressingly ugly. I have no idea what other areas you are talking about since those aren’t common names. Perhaps the area by the pier is the Love River area near Wufu?

Imo find a job first and then find an apt that is conveniently located to that. I would lose my mind commuting 30 plus minutes each way in the heat and traffic. I can walk to my school in 15-20 mins.[/quote]

Thanks for the info. I meant art museum area when I said art gallery :slight_smile:. I know what they are in Chinese but still learning how to type with pinying right now. I went to see one of the model homes in that area last weekend. It was my first time seeing how modern homes in Taiwan can be decorated. Pleasantly surprised but realize that inside can be changed, outside/location cannot. My understanding is that the immediate front rows facing the art museum is pricey but as you go into the smaller surrounding streets, it gets a tiny bit better. Is that right? Any specific places you’d recommend in the Art Museum neighborhood? I’m also told that construction is important (steel beam more preferrable but $$$). I’m working not too far from Fitness Factory on 博愛路 so commuting shouldn’t be too big of an issue. The pier area I’m talking about I think is referred to as the Banana Pier sometimes? Not the Love River.

I’m staying with family right now. I agree it’s more of a renter’s market here vs California right now where a lot of people are purchasing properties to rent it out because rental market is so strong. Ideally, I’d like a landng pad here in Kaohsiung. Just not sure how the market is behaving and more importantly the different areas in KH. But that’s where the good people of the forum like you come in :slight_smile:

Anyone know typical rate for a 30year fixed mortgage? As far as I know there’s no credit score system here in Taiwan, not really sure what factors go into deciding the personal rate.

Thanks guys for all the replies!

I don’t know about individual pricing of apts (this street vs that street) but there is a substantial premium for the Art Museum area. It is still way more reasonable than buying something in Taipei but I’m a renter so I don’t know too much about the pricing. The nice part is that most of it is new construction and has some modern styling. Despite living in a <5 yr old apt building I’m always disappointed in the cost cutting and oversights in the details. For example: no power outlet on the 2nd balcony for a dryer, no phone line behind the TV for one of the common cable TV options, a light switch located behind a sliding door that breaks the light switch and probably a dozen other similar things. My foreign manager regards buying in this area though as an awful investment. He considers most of these building as cheap construction. And he’s not talking about the steel beam part. He’s talking about the interior of the apt and common areas just falling apart because of cheap materials. it doesn’t matter to me but 20 yrs from now it might be more important.

I also don’t understand the appeal of buying unless you really think the place will meet your needs for 10-15 yrs. There’s a bubble in Taiwan and even though it’s not as bad in Kaohsiung the effect will still be felt. And renting is ridiculously cheap. I would rather take the extra cash and invest it in something instead of having it tied up in an apt that might lose value.

My apt is small (maybe 20 ping advertised but interior space is more like 15 ping. it’s a 1.5 bedroom (very small bedroom) that is directly on the Love River next to the new white bridge (Meishu Rd). I paid for the view since I am on the 14th floor and I have a completely unobstructed 180 degree view to the south. Despite overpaying (for the view) it’s still 16,000 including monthly guard fee and car/moto parking. You can get nice places in this area for 12-20K NT.

The Banana Pier is a strange area. There are a few decent looking apt buildings but for the most part it’s an old run down area. It was part of the old harbor warehouse district and those weren’t desirable areas to live. It’s seeing a big revitalization recently due the Pier 2 Art Center but you can basically forget about having sidewalks to walk on and you will be surrounded by the 50+ yr old 3-5 story Taiwanese row houses. it’s also a good 30 min commute to the fitness factory.

If it were me I would be in absolutely no hurry to buy and rent a place somewhere between the Art Museum and Zuoying (Fitness Factory). tons of places and you can figure out if you really want to commit big money (both up front and long term) to buying when you can rent really cheap.

Yes… Obvious. :ponder: Lets say you buy that place… In 30 years you will actually own an asset… an assset worth ~NT$14.5m (keeping it simple and just assuming an inflation rate of 3%, FV=PV(1+i)^n, PV=6m, i=.03, n=30) If you’ve been paying rent that whole time you and your family will have… well… nothing to show for it. So you dont want to be here for 30 years? Live in it for a few years then rent it out to someone… let their rent pay that mortgage for you

Yes, I am oversimplifying (NPV of cash flows, etc.)… but its the difference between investing to end up with something to show for your efforts or walking away with nothing. The main reason not to buy is if you think Taiwan housing is in a massive bubble and prices will collapse. Something that is going to really impact higher-end property but have very little impact on something as cheap as NT$6M

Awesome feedback, thanks! Abacus, the examples you gave in cheaper constructions are exactly the things I won’t know but grateful that you shared with me.

So, do you guys think we’re in the bubble right now? Cause? Increase in tourism?

Yes… Obvious. :ponder: Lets say you buy that place… In 30 years you will actually own an asset… an assset worth ~NT$14.5m (keeping it simple and just assuming an inflation rate of 3%, FV=PV(1+i)^n, PV=6m, i=.03, n=30) If you’ve been paying rent that whole time you and your family will have… well… nothing to show for it. So you dont want to be here for 30 years? Live in it for a few years then rent it out to someone… let their rent pay that mortgage for you

Yes, I am oversimplifying (NPV of cash flows, etc.)… but its the difference between investing to end up with something to show for your efforts or walking away with nothing. The main reason not to buy is if you think Taiwan housing is in a massive bubble and prices will collapse. Something that is going to really impact higher-end property but have very little impact on something as cheap as NT$6M[/quote]

There are other costs of home ownership that you are neglecting. Buying makes sense in the US where monthly mortgage payments are not significantly higher than rental payments but here it just doesn’t make sense.

The other part of the equation that you neglect is that a smart person would be investing the savings (total cost of home ownership - rental price) and historically making more than 3% back on that portion. One person might be house rich but the other will have more liquid assets if they ever want to invest in a business or something.

And yes there is a bubble. I really hope that it just slowly deflates and housing prices flat line for a decade but I wouldn’t be surprised if there were some big losses of value over the next decade.

[quote=“Lo Pan”]Yes… Obvious. :ponder: Lets say you buy that place… In 30 years you will actually own an asset… an assset worth ~NT$14.5m (keeping it simple and just assuming an inflation rate of 3%, FV=PV(1+i)^n, PV=6m, i=.03, n=30) If you’ve been paying rent that whole time you and your family will have… well… nothing to show for it. So you dont want to be here for 30 years? Live in it for a few years then rent it out to someone… let their rent pay that mortgage for you

Yes, I am oversimplifying (NPV of cash flows, etc.)… but its the difference between investing to end up with something to show for your efforts or walking away with nothing. The main reason not to buy is if you think Taiwan housing is in a massive bubble and prices will collapse. Something that is going to really impact higher-end property but have very little impact on something as cheap as NT$6M[/quote]

The benefit of renting over buying is that I can move from my taofang into a three bedroom when I have a family. If I bought this place, any future family would have to be crowding into the tiny bedroom area. Oh and by the way, the 1,333 I counted up there forgot to include interest – a big factor. I don’t see how buying a home is an investment unless you’re buying it specifically as an investment property – meaning you have another home and therefore another mortgage to pay – and also, the standard rent levels are still below mortgage payments, so it’s a burden more than an investment. In my old place in Taipei, it would have taken my landlady 70 years to make up what she paid for the place based on my rent alone. Somehow this does not seem wise to me.

[quote=“Hokwongwei”]

The benefit of renting over buying is that I can move from my taofang into a three bedroom when I have a family. If I bought this place, any future family would have to be crowding into the tiny bedroom area. Oh and by the way, the 1,333 I counted up there forgot to include interest – a big factor. I don’t see how buying a home is an investment unless you’re buying it specifically as an investment property – meaning you have another home and therefore another mortgage to pay – and also, the standard rent levels are still below mortgage payments, so it’s a burden more than an investment. In my old place in Taipei, it would have taken my landlady 70 years to make up what she paid for the place based on my rent alone. Somehow this does not seem wise to me.[/quote]

You live in Nankan, right? That amount you are spending on a taofang seems waaaaay too high. NT$12,000 should get you a normal sized 3-bedroom apartment. At least, that’s what they go for in the building I live in, and it’s in the “nice” part of Nankan by the riverside park.

Even if you bought a small place, you don’t have to keep it for the full term of the mortgage. You can buy a bigger place and refinance almost any time (depends on the mortgage small print, but usually after about 3 years). Nankan properties have increased in value about 60% over the last 3 years, and are set to increase further when (or if!) the proposed Taoyuan Aerotropolis project takes off.

The important thing to do is stop hemorrhaging money through renting and start putting it into building equity. It used to gall me that some fat, lazy fuck was getting rich by doing nothing except lend me the keys to his house. :neutral: I would lie awake at night gnashing my teeth at the thought of it.

My taofang is one of those nice new ones with a split level, so living in it is like having one and a half bedrooms and a living room, and it’s some 18 ping. Yeah I could have a three bedroom place for just a little bit more but it’d be pretty lonely…

I know property has greatly appreciated here – and everywhere – but just look at this graph based on data from the Institute for Physical Planning and Information (財團法人國土規劃及不動產資訊中心)

This is how many years it would take to pay for a house if you saved your income spending a penny, based on average (mean? median? I’m not sure) annual income. In Taipei it certainly looks like a bubble; housing prices have been rising since 2003, but they shot up significantly in 2009 and haven’t fallen much. Meanwhile, salaries have not risen accordingly. One of these days people are going to start defaulting on loans and then…

It doesn’t help that almost all new construction projects are for high-end luxury apartments instead of things affordable to the average laobaixing. These are becoming investment assets for the wealthy while the middle-class and low-income families of the future are going to find it harder to find a place to live.

My situation makes more sense for me to plan on buying than renting but I hear you guys on the age-old debate of rent vs buy. I didn’t go into details because I didn’t want to bore you:) Can anyone shed some more light on the current market trend? Demographic of the desirable areas? Would replay in milk tea, haha.

[quote=“ucla bruin”]
So, do you guys think we’re in the bubble right now? Cause? Increase in tourism?[/quote]
That’s it right there, Chinese tourists who come to Taiwan to invest in real estate, to be more precise. If the Ma administration doesn’t do anything to control this, the bubble will continue to inflate, leaving the locals unable to afford to buy property in their own cities. The bubble may not be as big as the one in Taipei, but all the metropolitan areas in Taiwan have one.

Well, the Chinese are a minor component, the vast majority is rich Taiwanese investing their money in property, often taken back from overseas after the inheritance and gift tax was almost abolished.
The main cause are the record low interest rates and no capital gains tax on buying and selling houses and low annual property tax. Plaything for people with money to speculate.

[quote=“Hokwongwei”]
The benefit of renting over buying is that I can move from my taofang into a three bedroom when I have a family. If I bought this place, any future family would have to be crowding into the tiny bedroom area. Oh and by the way, the 1,333 I counted up there forgot to include interest – a big factor. I don’t see how buying a home is an investment unless you’re buying it specifically as an investment property – meaning you have another home and therefore another mortgage to pay – and also, the standard rent levels are still below mortgage payments, so it’s a burden more than an investment. In my old place in Taipei, it would have taken my landlady 70 years to make up what she paid for the place based on my rent alone. Somehow this does not seem wise to me.[/quote]

Yeah… I used your numbers… I assumed you a good reason for choosing them

Even I rent in Taipei because my rent is a small fraction of what the mortgage would be. There is a massive disconnect most of the time here in rental yields. In my case, the rent is so low on my current place that the freedom to move at will far exceeds the benefits of owning a place here… so instead I own in the US and will likely break down and eventually buy here as well.

…but if I were able to find a magical land where the prices/payments you quoted initially were correct, the choice would, as you said, be obvious. I’d buy every time.

Owning a house is most definitely a form of investment/savings… If you rent all your life and when you get to 70, you have nothing and still have to work to pay rent. If you pay a mortgage until youre 70, you own an asset that might have some capital appreciation or loss (sounds like an investment to me) but you own an asset thats worth something. You can sell that asset and use the proceeds to then pay the rent on an apartment and have some money to live on without working.

Damnit! I am not lazy! :wink:

There is no maxim to follow about buying or renting, buying can put you in the shitter big time if there is any correction or population drop-off, and renting can also be a painful drain of money.

As for apartments in Taiwan, anybody can see that a lot of them are going to be hard to sell in the future as the buildings deteriorate. Location is usually the main thing, close to jobs, MRT, where things are happening or scenic spots. In that case buying something in Kaoshiung on the harbour or close to Love river seems like a good bet as prices haven’t gone completely mad there yet.

[quote=“headhonchoII”]Well, the Chinese are a minor component, the vast majority is rich Taiwanese investing their money in property, often taken back from overseas after the inheritance and gift tax was almost abolished.
The main cause are the record low interest rates and no capital gains tax on buying and selling houses and low annual property tax. Plaything for people with money to speculate.[/quote]

How long as this been going on here? Is the low interest rate artificially instigated by the government to revive the market from the crash?

I’m not expecting to get the same ROI as the U.S. if I acquire a rental property here so a purchase will be for family. But at the same time, I need to be mindful the investment aspect. Just totally clueless on the different areas right now. Art Gallery area is nice but more pricey. Offers newer constructions and slightly more open space, less dense living. Anywhere else you guys like? 農16?I heard some of the green lots there right now (currently baseball fields and something else) are not permanent. Might be sold to builders in the future. There’s only 1 true lot of green there, that is the park.

There was no property crash in Taiwan, and Taiwan didn’t have an economic boom in the 2000s either. It did go through a tough year or two around the financial crisis. Interest rates were low prior to GCC and have gone to record lows since.

It’s very different than the US. Even Kaoshiung is very different than Taipei.

That’s why you should just take your time and figure out what area you would like to live in first.