Living Problem in Taiwan

   SCU English Writing 1

Eric Hsu – 01121123

Reasons why housing prices are extremely high in Taipei

“You have to live without eating and drinking for 15 years buy a house in Taipei City.” This is quoted from an article which CNN reported in April. High housing prices are becoming a huge burden to the younger generation who wants to build a family. Take a 30 ping apartment for example, it would cost you NTD$ 18 million. The reasons of such high housing prices are both authority and people need to pay attention. Three reasons why people cannot afford such high house prices are investor manipulation, low incomes level, and limited land.

        The first reason is the improperly and recklessly speculate in real estate by investor and constructive companies. In the past ten years, the average price each ping in Taipei city has risen from NTD$ 257,000 to NTD$ 624,000. Investment of real estate is almost without risk which is always profitable; therefore, investors pour their money in house market and hold many houses with low tax and cost .Low interest of loan also provide investors abundant fund to invest. In addition, in the progress of selling, price is constantly rising up by investor and salesman. Unfortunately, the prospective house buyer who really have the demand of living suffer from prices margin of manipulation. If the investment environment of domestic industry do not improve, hot money will keep pouring into real estate market and cause a vicious cycle.

        Second reason is stagnant average income level, which has remained at roughly the same level for more than a decade; however, the prices of houseing were rising 2.4 times in the past ten years. The improvement of incomes did not catch up the speed of rising price. If compare Taipei's ratio for housing prices to incomes with others countries, CNN's article said that Taipei is 15.2, New York is 6.1 and London 8.5. These are all modern and crowded cities, but Taipei is the most unaffordable house market in the world. Take an average dual-earning family for example, their incomes for a year is NTD$ 942,000, a new constructed house in 30 ping costs them NTD$ 70000 to paid for the loan. Huge economic pressure could drag down the quality of life. Therefore, younger generation will tend to rent a house rather than buy one.