Mortgage eats an average of 56% of household income in Taipei, Taiwan

[Taffy]

Just to show it's not just the West that likes to indulge in housing bubbles. Stagnant wages, low interest rates, and nervousness about the local bourse means that "investing" in property has been one of the few routes to generate returns for people in Taiwan.

The survey also showed that the cost of owning a home was highest in Taipei City, where the prices climbed to 14.3 times income [...] in 2010 monthly mortgage repayments accounted for a staggering 56.2 percent of monthly household income in Taipei City

All it takes is interest rates to rise just a little, and millions of people are going to end up underwater. As it mentions later in the article, Taiwan has a vacant home rate of 19.3%, and new homes are still being built as fast as they can pour the concrete. And this with the population projected to decline! So, there's an oversupply of accommodation, yet average wage earners have no hope of getting on the ladder. A 1,000 sq. ft. downtown apartment (link in Chinese, but you can look at the pictures) with parking and no view goes for US$810,000. The average household income for Taipei (usually both parents work in Taiwanese families) is US$55,000. Gross rental yields are 1.57%. I have friends who are meeting their repayments only with the help of parents and siblings, clinging on by their fingernails, and yet people are still desperate to get on the housing ladder. Crazy.

[newb]

Holy crap! And the sad part is if you dont want to pay that but cant afford to move out of country, where do you go when its like that everywhere?

[Taffy]

Move down south, I suppose, where jobs are few but house prices are a quarter of Taipei's rates. Or rent, which isn't too horrific if you're in suburban Taipei.

[Jack]

You know, I'd watch those HGTV shows (e.g. House Hunters and whatnot) where people were buying $1M+ homes in places like Manhattan and San Francisco and assumed the normal income must be 6-figures or something, but maybe that's not true.

How is it that people in those sorts of areas are able to get approved for the crazy mortgage in the first place?

[TheDude]

Thats Crazy. We lived in Hsinchu for a year and it sure seemed like the big fancy places were pretty empty.

[johnintaiwan]

I live in Taiwan and the housing prices are crazy! but the rent is really cheap. The apartment might cost $300,000 us, but you can rent it for $300 us a month. Im stashing now so when the bubble bursts I will be able to scoop a house up cheap. Hopefully I wont have to wait too much longer.

[Big Boots Buddha]

Just to show it's not just the West that likes to indulge in housing bubbles. Stagnant wages, low interest rates, and nervousness about the local bourse means that "investing" in property has been one of the few routes to generate returns for people in Taiwan.

The survey also showed that the cost of owning a home was highest in Taipei City, where the prices climbed to 14.3 times income [...] in 2010 monthly mortgage repayments accounted for a staggering 56.2 percent of monthly household income in Taipei City

All it takes is interest rates to rise just a little, and millions of people are going to end up underwater. As it mentions later in the article, Taiwan has a vacant home rate of 19.3%, and new homes are still being built as fast as they can pour the concrete. And this with the population projected to decline! So, there's an oversupply of accommodation, yet average wage earners have no hope of getting on the ladder. A 1,000 sq. ft. downtown apartment (link in Chinese, but you can look at the pictures) with parking and no view goes for US$810,000. The average household income for Taipei (usually both parents work in Taiwanese families) is US$55,000. Gross rental yields are 1.57%. I have friends who are meeting their repayments only with the help of parents and siblings, clinging on by their fingernails, and yet people are still desperate to get on the housing ladder. Crazy.

Because they can't get married unless they buy in. Im on the mainland, 9 years. Incomes are WAY lower in all but the big 5-6 cities in China. I dated for years and every day with a girl over 25 started with: how much money in the bank, how big is your apartment, what kind of car do you have?

Choices for males in East Asia: 1) buy in, whatever the cost to get a wife 2) no serious girlfriend 3) prostitutes

[GuitarStv]

Just to show it's not just the West that likes to indulge in housing bubbles. Stagnant wages, low interest rates, and nervousness about the local bourse means that "investing" in property has been one of the few routes to generate returns for people in Taiwan.

The survey also showed that the cost of owning a home was highest in Taipei City, where the prices climbed to 14.3 times income [...] in 2010 monthly mortgage repayments accounted for a staggering 56.2 percent of monthly household income in Taipei City

All it takes is interest rates to rise just a little, and millions of people are going to end up underwater. As it mentions later in the article, Taiwan has a vacant home rate of 19.3%, and new homes are still being built as fast as they can pour the concrete. And this with the population projected to decline! So, there's an oversupply of accommodation, yet average wage earners have no hope of getting on the ladder. A 1,000 sq. ft. downtown apartment (link in Chinese, but you can look at the pictures) with parking and no view goes for US$810,000. The average household income for Taipei (usually both parents work in Taiwanese families) is US$55,000. Gross rental yields are 1.57%. I have friends who are meeting their repayments only with the help of parents and siblings, clinging on by their fingernails, and yet people are still desperate to get on the housing ladder. Crazy.

Because they can't get married unless they buy in. Im on the mainland, 9 years. Incomes are WAY lower in all but the big 5-6 cities in China. I dated for years and every day with a girl over 25 started with: how much money in the bank, how big is your apartment, what kind of car do you have?

Choices for males in East Asia: 1) buy in, whatever the cost to get a wife 2) no serious girlfriend 3) prostitutes

Options 1) and 3) are the same, just with a different up front sticker price.

[rockstache]

Just to show it's not just the West that likes to indulge in housing bubbles. Stagnant wages, low interest rates, and nervousness about the local bourse means that "investing" in property has been one of the few routes to generate returns for people in Taiwan.

The survey also showed that the cost of owning a home was highest in Taipei City, where the prices climbed to 14.3 times income [...] in 2010 monthly mortgage repayments accounted for a staggering 56.2 percent of monthly household income in Taipei City

All it takes is interest rates to rise just a little, and millions of people are going to end up underwater. As it mentions later in the article, Taiwan has a vacant home rate of 19.3%, and new homes are still being built as fast as they can pour the concrete. And this with the population projected to decline! So, there's an oversupply of accommodation, yet average wage earners have no hope of getting on the ladder. A 1,000 sq. ft. downtown apartment (link in Chinese, but you can look at the pictures) with parking and no view goes for US$810,000. The average household income for Taipei (usually both parents work in Taiwanese families) is US$55,000. Gross rental yields are 1.57%. I have friends who are meeting their repayments only with the help of parents and siblings, clinging on by their fingernails, and yet people are still desperate to get on the housing ladder. Crazy.

Because they can't get married unless they buy in. Im on the mainland, 9 years. Incomes are WAY lower in all but the big 5-6 cities in China. I dated for years and every day with a girl over 25 started with: how much money in the bank, how big is your apartment, what kind of car do you have?

Choices for males in East Asia: 1) buy in, whatever the cost to get a wife 2) no serious girlfriend 3) prostitutes

Options 1) and 3) are the same, just with a different up front sticker price.

Seriously. You are so much better of single in an environment like this.

Having said that, I am quite familiar with the family and cultural pressure that comes into play here (to marry and more importantly...to procreate). I know it's almost impossible to ignore/endure.

[Taffy]

Choices for males in East Asia: 1) buy in, whatever the cost to get a wife 2) no serious girlfriend 3) prostitutes

Wow, that's not the way it works in Taiwan. Anyone who asked about money on the first date would be seen as (a) unconscionably rude, and (b) a gold digger. I've never been asked about my car, salary, or apartment by a woman (eleven years in Taiwan, first five of those I was dating). Maybe you should come over a visit - personally I much prefer life in Taiwan than in China.

Oh, and there are (slightly) more women than men in Taiwan. So we don't have the whole "girl babies are worthless" mentality either (though it might have been true a couple of generations ago).

[LalsConstant]

I dated for years and every day with a girl over 25 started with: how much money in the bank, how big is your apartment, what kind of car do you have?

I don't mean to make light of this, but it's amazing how much every human culture has in common sometimes.

[Jeremy]

This is a very old post, but...

We are in Taipei, Taiwan now.  The apartment we rent would sell for about $1.5 million, yet our monthly rent is only about $1300.  That is a deal I will make any time

There are strong cultural interests in owning property, so much so that it seems nobody knows how to do math.  This isn't speculation or for income generation, it is just to "own your own home."  I've had this conversation with many locals, and it borders on trying to convince people to convert religions or change sexual orientation.  Some of my wife's former coworkers, a married couple both with full time jobs, spend nearly every penny they make just paying their mortgage, and will often tell other people that they too need to buy a house.  Misery loves company


We are in Taiwan to have a baby, and came here to do IVF treatments as it is about 80% off US prices

There are signs all over the hospital that say "A boy or a girl, they are both just as good!"  Yet we overheard a woman crying and begging her doctor to make sure she has a boy.  Her husband's parents were applying a ridiculous amount of pressure, as if she has a choice in the matter

Legally, the Doctors and Nurses are not allowed to share the sex of the baby until the 3rd trimester, for worry that expecting parents will take matters into their own hands if it is a girl

Conversations with random people around the city usually involve them asking if we are expecting a boy or a girl.  Their faces light up noticeably when we say it's a boy, particularly amongst the older generation

[russianswinga]

Wow, such a weird mentality.

We're pregnant right now and are delighted that it's a girl. And like Mr. Money Mustache we will likely stop with 1 child.

[slugline]

With a real estate market like that, I can't help but wonder what the finances look like from the landlord side.

They must be counting on mega-appreciation to make up for the tiny rents?

[Jack]

I thought the "lack of girl babies" thing was not because girls were perceived to be worthless, but because boys were perceived to be necessary (to take care of the parents in their old age) -- in other words, that having girls was just fine as long as you had at least one boy. Then, the problem came with China instituted the "one child per couple" policy and you suddenly had a huge problem if the only child you were allowed to have wasn't a boy.

But I must be wrong about that, because it doesn't explain how it could also be a problem in Taiwan (unless the PRC took over the ROC when I wasn't paying attention).

[johnintaiwan]

(unless the PRC took over the ROC when I wasn't paying attention).

Depending on who you ask here that is exactly what has happened

[Jeremy]

I thought the "lack of girl babies" thing was not because girls were perceived to be worthless, but because boys were perceived to be necessary (to take care of the parents in their old age) -- in other words, that having girls was just fine as long as you had at least one boy. Then, the problem came with China instituted the "one child per couple" policy and you suddenly had a huge problem if the only child you were allowed to have wasn't a boy.

But I must be wrong about that, because it doesn't explain how it could also be a problem in Taiwan (unless the PRC took over the ROC when I wasn't paying attention).

I think you have it right, you need a boy to carry on the family name, take care of the parents, etc...

While legally families in Taiwan can have as many children as they want, financially it is a different matter.  When you spend most of your paycheck on a 1 bedroom apartment you just had to buy to make your parents stop harassing your, having even one child can break the bank

Depending on who you ask here that is exactly what has happened

Financially this seems to be the case


The protests in Taiwan by college students sometime in the last year were primarily driven by legislation allowing Mainland Chinese to invest in the Taiwan real estate market, which would inevitably drive RE prices even further through the roof

[MgoSam]

Wow, this makes me feel so much about my parents. Coming from an Indian background, my mom will offer to find me a wife as often as she can get away with (she knows that question pisses me off, so treads carefully), but doesn't seem pushy at all. The only pressure I've got into buying is that she thinks I should get some rental properties after I have owned my own place, otherwise she doesn't appear to care about societal pressure. My guess is that I don't care at all about the Indian community and what it thinks, I am happy with my life and feel comfortable to do what I want.