TAIPEI (Taiwan News) — Taiwanese youths are questioning the value of buying a home, despite traditional views in society that homeownership equates to wealth and security.
The Economist highlighted the burden of homeownership for young people this year. The report said the average house price in Taiwan is 11 times the average income.
However, according to the UN, housing is affordable when the house-price-to-annual household income ratio is 3 or less and the rent-to-monthly household income ratio (RIR) is 25% or less.
In Taipei, average housing prices are 16 times the average income. Taipei also ranked higher than major cities, including New York at 9.8, London at 14, and Seoul at 13.
The city in Taiwan with the lowest housing price-to-income ratio is Keelung at 6.5. This number is still above the level considered affordable by the UN.
The report noted that the average household in Taiwan spent almost 50% of its disposable income on mortgage payments last year. In Taipei, households spent more than 70%.
The report quoted one citizen as saying that Taiwan’s government has long promoted homeownership in line with traditional Chinese beliefs that land equals wealth and security. Approximately 85% of Taiwanese households live in homes they bought, the report said.
Home prices in Taipei have tripled since 2000, according to one statistic. Older generations benefited from investing in homes when they were young, but youths today are less likely, the report said.
Taiwan has more housing units than households, noted one urban planning advocate. According to the most recent census, one-fifth of homes are empty in Taiwan, while almost a quarter of new properties from the last five years are empty.
The report also raised the issue of wealthy buyers hoarding unused properties. These property owners pay very little in taxes, as the government has been reluctant to change tax policies.
