Even if house prices drop, which I doubt will happen, it’ll only be temporary. There was a drop during SARS and the rich just picked up more bargains and became richer! The same will happen again if there’s a drop. People don’t need to sell so a temporary drop is probably a wealthy person’s dream. Add to that some young uns buying and voila , prices rise again. The only way to change the market is through legislation,
Either that or something to make these houses not have value anymore… That’s the only market correct solution to this problem. Legislation will require very socialist touch. Meaning essentially confiscate unused properties.
I have no idea what the hell you’re talking about. Sounds like you’re just being a difficult ass for the sake of it.
Literally some of the wealthiest countries in the world are not included in that list, so claiming Taiwan’s “per-capita net worth minus real estate is fourth highest in the world,” means what, exactly? It’s like claiming the Yankees are in second place in the AL East, and pointing to a list that excludes the Red Sox and Blue Jays. ;D
Blah blah blah I’m a difficult ass, blah blah blah.
Rays have been really good too…like really good.
Every time there’s a housing bubble the government steps in and slows the price increase. That’s why the pop never happens.
https://www.researchgate.net/publication/315766152_Taiwan_Housing_Bubbles_and_Affordability
I would love to see some legislation. But it’s possible this could play out differently than it did during SARS. It might not necessarily lead to a “super sale at the [housing] stock store”. For one thing, Taiwan’s population continues to crash. Kindergartens through universities are closing their doors like crazy because nothing can entice parents to have children, and that low-birth generation is coming of age. Why? We’ve beat this horse so very dead. Wages haven’t budged in decades and housing is increasingly more expensive (60% of the monthly income would need to go towards a mortgage on a property of only 12 ping in Taipei. Sorry, if any single person with a cat can live in a space like that long term, they’re either very short or absolutely crazy. Now you want me to have a spouse and at least one kid? Also, if it’s only one person, that 12 ping space is over 100% of their monthly earnings)
This bubble will either burst or the government will have to step in. Sensible investors of massive amounts of property in Taiwan will start to sell off if China lets their property investments fail, as the CCP government is currently threatening to do. It’d only take a few people realizing there won’t be a population to buy their existing homes in 20 years to start flooding the market. The problem is that so many of these properties were built in the style of China – as investments to hold on to and make a quick buck off of, not to live in. So it’s a lose-lose situation for us all.
Older property in less popular spots will stagnate and drop in price over time. No demand will make it so. But the economy is doing well in Taiwan so there’s not really any reason to see a bust.
Is there any data regarding the correlation between population decline and property prices? Perhaps from other countries? Personally, I think the link is quite tenuous.
Plus, you could argue that more people are staying single or getting divorced, so the demand for housing might be maintained. There are always foreign investors, as well.
It’s stupid to compare Taiwan and China’s property markets. Property prices are overvalued in Taipei and they are overvalued within the normal range. China’s property prices are bloated beyond belief. Income is extremely low even in the richest cities like Shanghai and Beijing but property prices are more expensive than in Taipei where avearge income is about 3 times as high.
foreign investors think that the housing market in Taiwan is one of the worst real estate investment markets in the world.
They also can’t really invest with ease in Taiwan the way foreign investors can in places like the US, where even San Francisco and Manhattan have VERY reasonable real estate prices in comparison to Taipei. Look at that monstrosity next to 101. Not one billionaire wanted to buy a single 35 million USD unit. Three years later and only one unit was sold…to the company that built the building. Something similar in Milan, NYC, LA, London, etc. would go for 10 million USD tops, why would any investor want to pay 3x+ that for something that literally no one wants? And Taipei real estate (along with the rest of Taiwan) is almost entirely dingy, windowless, not insulated concrete blocks. Not attractive to people who can buy luxury penthouses with floor to ceiling, triple pane glass windows overlooking beautiful views, kitchens that cost USD500k alone, integrated HVAC systems that you don’t even notice are there, usable, private terraces with fully equipped outdoor kitchens, etc., for a fraction of the cost in any other city on earth besides Hong Kong.
You must not be very familiar with real estate prices in other cities if you think luxury penthouses only cost a fraction.
That is the exception, not the rule. It’s all about the gimmick.
Which wealthy country isn’t included in that list? Other than the micro-states, all wealthy countries are included in the list.
Also, there are plenty of reasons why investors might not necessarily invest in other cities…
Capital gains taxes
Non resident buyers taxes
Depreciating currencies
People have been waiting and hoping for almost two decades for prices to drop! I think the crux of the matter maybe that you have to convince people there’s a better place to put their money. Rich Taiwanese people already have real estate in NY, Tokyo, Cali, Vancouver, Seattle, etc, so they can afford to buy overseas and at home.
Location counts far more than luxury in real estate. There are some very nice houses in Taiwan that don’t cost as much as you think, because of location. I think big thing is schools, transportation, etc.
So if you live in the boonies you could certainly build yourself a very nice villa for cheap, but it wouldn’t be worth as much as you think because of location.
Just like shit windowless moldy houses in Xinyi district goes for insane prices, because again, location.
everybody knows, you buy the shittiest house in the nicest neighborhood.
I know a few Taiwanese people who went into real estate and now have 2-3 empty houses sitting there collecting spider webs.
Like I said, one quick way to fix this is just confiscate empty houses or charge a very high vacancy tax… But there will be rioting in the street as soon as the government does this as this is very un-capitalist.
Why? Land use is one of the biggest issues in Taiwan, and letting folks buy multiple properties and leaving them to collect cobwebs is incredibly inefficient. They should be taxed accordingly.[1]
Guy
[1] Yes I know Taiwan’s lawmaker class and its landlord class are nearly impossible to differentiate—and that the “taxed accordingly” part I wrote will never happen.