Taipei--Although home prices in Taiwan declined slightly over the past few quarters and are likely to fall by 1 percent for the whole of this year, most people in the country still cannot afford to buy a home due to a high housing price-to-income ratio, according to a research report issued Tuesday.
Real estate prices in the country are expected to continue a moderate decline in the next 1-2 years and gradually move toward stability after experiencing a 1 percent dip this year, Taipei-based Taiwan Ratings (????) credit analyst Patty Wang (???) said Tuesday at an event to mark the release of the company's 2017 Taiwan Mid-Year Credit Outlook.
However, the high housing price-to-income ratio in Taiwan could pose a risk to the local property market in the long term, said Daniel Hsiao (???), another credit analyst of Taiwan Ratings, a partner of U.S.-based Standard & Poor's.
The housing price-to-income ratio for the third quarter of 2016 in Taiwan hit a record high of 9.4, with Taipei posting the highest ratio at 15.5, followed by 12.7 in New Taipei. The ratio in Taipei is far higher than 4.5-5 in Singapore and Tokyo and approaching the 18.1 recorded in Hong Kong. Hong Kong had the least affordable housing compared with metropolitan markets around the world, Wang said, citing data provided by the Ministry of the Interior.
If the crisis of unaffordable housing in Taiwan continues, it could drive housing prices to slide further and affect the banking sector, Hsiao added.
Source: Focus Taiwan News Channel