Recent numbers suggest that the number of young people buying houses in Taiwan has plummeted in recent years.

The government has pushed a handful of limited policies, such as increasing taxes on home sales too soon after purchase by speculative investors. Other policies such as subsidized low interest rates may have exacerbated the main problem plaguing Taiwan’s housing markets now, spiraling prices.

Despite Taiwan’s negative population growth with the lowest fertility rate in the entire world, and no system whatsoever for attracting permanent immigration, even with those taxes on sales, speculative investment has meant that demand for homes constantly outstrips supply.

That a handful of people continue to increase their share of ownership over this supply, and that the low general property taxes, even on those who own hundreds or even thousands of homes, mean that many are simply left unoccupied as a long term store of value, rather than being used to house people.

The liberalization of real estate speculation is contrary to the foundations of the ROC, whose founders suggested that “increments in [land] value, they argued, would be the consequence of collective social progress, and would be returned to the collectivity to fuel the ongoing process.”

Instead, the government has allowed the average effective property tax rate to dip to 0.12 percent, one of the lowest in the world.

This is layered on by local corruption in land distribution rights which allow well connected local elites to acquire land at sub-market rates and then use the profits from the resale to purchase even more land elsewhere.

In the North, youth home purchases dropped more than six percent in less than 10 years, and suggests that many of the purchases are being conducted by the same closed group of elites who control the majority of the housing supply.

The South, in particular near high tech development areas have also faced staggering price increases. Kaohsiung’s Zuoying and Tainan’s East District faced increases of 63% and 92%, respectively, between 2020 and 2021.

The irony is that because of Taiwan’s utter demographic collapse, the large glut in housing supply relative to the population should be making housing more affordable, which would indirectly encourage earlier marriage ages and larger families. Because of governmental refusal to take action, the opposite is taking place, as housing has become out of reach for the majority of young people in Taiwan, further exacerbated by slow and inconsistent minimum wage increases, and price increases.

 

Sources:

Chang, M. H., & Gregor, A. J. (1983). Essays on Sun Yat-sen and the Economic Development of Taiwan. Maryland Series in Contemporary Asian Studies1983(1), 1.