Statistics released this week show that housing in Taipei is the most expensive in the world.
According to the island's Construction and Planning Agency (CPAMI), the Taiwanese capital's home price to income ration (PIR) was a globe-topping 15.01 in late 2013, making it the most unaffordable city to buy property in the world.
According to the Demographia International's 2014 Housing Affordability Survey published in January, Hong Kong was branded the most unaffordable, followed by Vancouver and San Francisco.
The survey said that Hong Kong's average home price rose to 14.9 times gross annual median household income from 13.5 times in 2013, the highest ever level recorded by the survey in its 10-year history.
With the PIR at 15.01 and 12.67, Taipei City and New Taipei City have edged out Hong Kong and San Francisco for the top and third spots among the world's most unaffordable cities to buy property.
According to Quartz, "to buy a home, the average Taipei household must now save 15 years’ worth of wages—and that’s if they don’t plan to eat meanwhile."
Taipei has two things to thank for its rocketing prices: quantitative easing by Western central banks (driving down yields on Western assets) and the deluge of bank loans out of its northern neighbor, Chinese mainland However, Taiwan’s regulators made things worse in 2009 by lowering taxes on real estate and gifting. Though the finance ministry countered that in 2011 with a luxury tax—15% on property sold within one year and 10% within two years—that’s done little to contain prices.
Taiwan's current administration, and president Ma Ying-jeou, are hugely unpopular on the island, particularly with young voters. Last month, tens of thousands took to the streets to protest a proposed trade pact with China which they said would endanger the island's independence from the mainland.
[Image via Flickr]
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