Let me clarify, what I meant is a 30/yr “fixed interest” mortgage. You can get a 20 or 30 or 40 yr mortgage in Taiwan(depending on age) but the interest rate can not be locked in at a low rate instead is continually floating based on market fluctuation and at the end of 30 yrs there may be a big balloon payment in store if interest rises or your monthly payments will change 10 yrs in depending on the contract. The interest is only fixed in Asia for typically 3-5 yrs. whereas in the USA you can fix it for 30 yrs and know exactly what you owe with no surprises.
The Amortization schedules given in Asia are just estimates based on when the contract was signed, but it can change each quarter as the interest rates climb.
But if you’ve been living in Kaohsiung since 2012, your lungs have been paying a hefty price.
The biggest problem with housing is Taiwan is the fact in deteriorates so quickly, shitty neighbors are everywhere, noise pollution is hard to avoid, etc.
But kudos to the person who bought an apartment for 5M in Kaohsiung in 2012 and can sell it for 20M today. Now they can afford a smallish 20+ year-old 1 bedroom apartment in Taipei!
It’s the whole addage of , the market can remain irrational longer than you can remain solvent. The fact that the apartment basically falls apart after a few years doesn’t seem to deter people here
I’m not concerned about the irrationality of the market really. I’m just saying that lowering the quality of your life for money’s sake is a fool’s game.
Last year, I had numerous sizable equity and option trades that more than tripled in the span of months. None required me to live in a crappy environment for years.
It’s sad that some people don’t have the experience/knowledge to understand that there is more than one path to wealth creation. So they don’t make accurate comparisons between asset classes.
If I were that good with markets, I would be happy to cash out my home equity, invest in the market, and rent a nice place! And then buy another house, because I like having a house Unfortunately, I am not.
Also, it’s not as simple as buying a major index. If I had bought the FTSE a decade ago, I wouldn’t be much better off. If I had bought construction stocks in Taiwan, I’d be worse off. You really have to know your stuff to do well in equity markets.
With property, I don’t think it’s quite the same. people need somewhere to live, so buy a house, go about their lives, and a decade later, their house is worth much more than they paid for it.
Only in the old days when population was booming in Taiwan. Taiwans real estate price is likely to go the way of Japan once the population decline sets in and the vacancy. The problem is for Taiwans entire growth the population kept rising so everyone thinks it won’t go down the same road Japan did cause they haven’t experienced it.
This is a really good read about the history of Taiwans 5 real estate cycles and the future of real estate prices in Taiwan. I can’t attached the PDF but I can email it to you. There are several research papers about Taiwans real estate and economy done by many University professors here in conjunction with the Govt https://www.researchgate.net/publication/315766152_Taiwan_Housing_Bubbles_and_Affordability
But in many US markets it seems like a no brainer to buy if you plan to hold for a while. You have to live somewhere, anyway, and buying basically locks in your rent. The last home we owned increased about 80% in the 8 years we had it, but the value of our initial 5% down payment multiplied by a factor of about 8. So we could have sold and used the profit to rent a similar place for 4 or 5 years (but that was near the bottom of the market in 2009, so we bought another house).
Yea totally agree US is a good long term market to hold real estate overall vs Taiwan. I think Dallas Fort Worth would be great now for many reasons. Among them you can own a 2000 sq ft house and get a high rental yield for the price of a parking space in Daan.
True and everyone values their house before the bubble pops. Though I dont think Taiwan will pop, it will be a very slow average bleed out over 2-3 decades as most govt indicators and University research papers suggest with some years seeing supposed small upsides on the overall downward trend. The problem is the tradition of needing a house for marriage and being told a house is a good investment no matter what by parents and grandparents. It they owned that parking space or house in Daan in 1999 they made out like bandits. If they went an purchased a house in Daan 2013- 2020, well not so smart given nearly every metric on home value estimation. My wife’s boss lost 20 million NTD on a 70 million NTD house near Shandao Temple MRT last year. These stories of 20-40% losses are all too common around Taipei/ New Taipei City now.
Dallas Fort Worth average houses have been increasing 8% YOY for 4 years… and will likely double in another 5 yrs. Taipei is not going to double from the current prices but fall slowly.
But its all good for renters they can rent a supposed million dollar apartment for 35k lol.
And you have to get lucky too.
Mostly you should be diversified into maybe three big pots and hopefully one of them will do well. If not the other two should keep you solvent. In that case it’s more risk management than luck.
Americans have been lucky/fortunate , in other countries you just wouldn’t be getting those outstanding stock market returns as you noted. Some countries also experienced major currency devaluation e.g. UK.
Some small countries such as Ireland with less deep financial resources faced bankruptcy during the credit crisis.
The US is facing currency devaluation pressure but they didn’t feel it in their pocket as much of that cheap money went back into their own stock market.
Taiwanese investors in property are also extraordinarily fortunate, but if they put their money into stocks they usually lost money until recently. A lot of this stuff is Not obvious in advance.
Now investing in TSMC is making a new generation of millionaires much faster than investing in property (their stock doubled within the year and I just see it continuing to go up…houses will not be doing that anymore in Taiwan).
The timing isn’t always obvious . That’s why it’s better to allocate to different pots.
I wish I had the money to buy property earlier but I was priced out from the get go. Now I am hardly bothered to buy anything in Taiwan even though I could easily get a mortgage (outside Taipei city anyway). I’d much rather buy in my rapidly growing safe and secure homeland or in Vietnam. I can always rent fairly cheaply here and move around when I need. Also the price appreciation will be very limited here but it will lock up a lot of my money.
The best strategy is to get loans on the cheap of strong money the NTD, convert it and invest it elsewhere where money is weaker and expensive to borrow but growth is higher.
I’d like to have my own place to do it up etc but they overcharge in the North of Taiwan for what you get.
I thought about buying in Taiwan many times from 2013-2020 but it makes no sense given every sensible metric.
One could have done way better elsewhere in US, Many areas of Europe, Malaysia, Vietnam, Cambodia. Better rent to buy ratio, better value appreciation, friendlier AirBnb practices, sometimes better vacancy rates(besides Malaysia).
Yea I wish I could have gotten in 10 yrs earlier in Taipei, but honestly I could have seen the same value appreciation nearly anywhere in California with better rental yields too
I chose to buy in the US instead of Taiwan in 2016 the real estate appreciated about 30% the past 4 yrs in L.A. and in Taipei its slowly falling since the 2014 peak and people in Taiwan still go on about how real estate is a great investment in Taiwan even today. It just bothers me because the young professionals here struggle and then they get fed this load of BS
Unfortunately, I am not.