It’s great to find a blog about Taiwan that is interested in some of the things I am about Taiwan life. Today I’m recommending Taoyuan Nights which includes lots of great posts on a wide range of topics: Finance, Taiwan, UK, etc. I enjoyed his skeptical treatment of the local real estate market which I found in a discussion on Forumosa about local property prices dropping. On that point, I could be wrong but I don’t think so. I’m pretty bullish on local property prices and don’t think that they are totally out of whack except in obvious hotspot areas. The pot really hasn’t boiled over in many other suburban or southern areas at all, so there is still some considerable upside.
I’m going to take a different stance on this: property prices are soft right now, that’s for sure. But you have to balance this against a number of other factors: a population that’s expected to increase to 30 million in twenty years or less. Family sizes are likely shrinking due to divorce, etc. as is the case in the US and in the UK.
However, I would caution against expecting prices to fall much, this market is not a property bubble in the same way as the US/AUS/UK/etc. markets are… In fact, it seems that the government is trying to squeeze the air out of the market by requiring even new houses to have a 30% downpayment. When we bought our place in 2000, it was only 20% downpayment for a new house.
Also, in the three years after we bought our place, property prices were at the bottom of the cycle here in Taiwan. Recently, prices have buoyed significantly in many areas, but the jump in prices isn’t as great as in US/UK/Aus.
I would reckon that the Taiwanese property market is very much at the end of the first stage of the next property boom in Asia, a boom that HongKong and China have already experienced. We’re on the upwards escalator, perhaps halfway up, just as the US is on the downwards escalator.
Whatever your position, you’ll enjoy Taoyuan Nights very much. Go there.