Saw this article a couple weeks ago, and my colleagues have been talking about this as well. For people who have been living in Taiwan for an extended period of time, have you seen any correlation with pre-sale transactions and future housing prices?
What do your collages are saying? The prices went up a lot because the government didn’t control the mortgages, now is more difficult. I’m not sure if the price already correct from that. I’m not sure the politicians will allow their real state crash, they will easy the mortgages again so they can keep making money.
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That’s exactly the route Canada took. Politicians pretended to want to help young people get affordable housing but as soon as the free market started lowering home prices (due to high interest rates and lower immigration levels) the government jumped in again to insure higher ratio mortgages, extend the amortization, and offer savings account for first time home buyers, all of which was done to drive up the prices.
The politicians are so heavily invested in real estate, also the same in Taiwan, that they just can’t help interfering in the free market to prop things up. I expect Taiwan’s government to intervene as well if the market drops even a percent.
I’d say a secondary issue is governments are afraid of getting their rich constituents mad when their homes lose value.
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Yes but only in volatile markets like Taichung and Taoyuan. And it takes a year or so. Many sellers will hold on unless they have a cash flow issue.Dont expect much
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Homeowners will eventually cave if downward pressure continues and their equity drops significantly but usually takes a few years for them to properly feel the pain and lose hope.
I suspect Taiwan’s government will swoop in to the rescue before that happens though.
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I’m not expecting much. Just curious how Taiwanese in the past react to these sorts of signals. I’m sure it would take a lot for people to stop believing the value of their house will go up 10%+ every year.
At least here in Taipei City they don’t react all. Why would they after gains of 10% a year for forty years? I did hear on a Taiwan Reporter podcast that some speculators in places like Taichung are discreetly taking haircuts but that it is very hard to find and get these deals. The speculators are said to be extremely sophisticated and will usually immediately size up an ordinary homebuyer immediately and take him (or more often her these days) to the cleaners. They are professionals. We are not. It sucks.
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I’d say for a foreigner it’s best to have a savvy local help with a purchase.
There was a poster on here once that said they had their wife do the entire transaction and when the papers were signed and she finally introduced him as her foreign husband, the seller flipped out and threatened to sue. This was because he would have charged more had he known it was a foreigner buying. Nothing came of his legal threats as I guess his lawyer let him know it would waste his money
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I’m guessing it’ll probably take something like what happened in China to really make people freak out or increase in interest rates due to inflationary pressures that make mortgages too expensive to hold onto, but like you guys mentioned, the government will do anything to keep value in a tiny concrete box here.
Such a different mindset compared to the U.S. for investing. Interesting to see though.