Ever since Ice Jao, a 30-year-old, got married two years ago, her mother has been pestering her to buy a home. The jewellery seller pays $425 a month to rent a flat about the size of two parking spaces on the outskirts of Taipei, the capital of Taiwan. She shares it with her husband and two cats. Her parents think that “only a house you own can really be a home”, she says. But Ms Jao is reluctant to become a wu nu, or “housing slave”, she says. That is slang for young homebuyers who feel trapped by their expensive mortgages.
Taiwan’s youngsters are not exaggerating when they call homeownership a burden. House prices on the island are exorbitant. In Taipei, median house prices are 16 times the median income. That is a higher ratio than New York (9.8), London (14), or Seoul (13). It is not much better outside the capital. The United Nations considers a housing price-to-income ratio of three to be affordable. But Taiwan’s national average is 11. Even its cheapest city, Keelung, has a ratio of 6.5. The average Taiwanese household spent nearly half of their disposable income on mortgage payments in the second quarter of 2024. In Taipei, they spent more than 70%.
Taiwan’s government has long promoted homeownership in line with traditional Chinese beliefs that land equals wealth and security, says Chang Chin-oh, a retired academic. “Everyone believes, ‘I must buy, or else I’m a loser’,” says Chen Taiyuan, an estate agent in Taipei who has run for parliament on a platform of housing-policy reform. As a result, nearly 85% of Taiwanese households live in homes that they own. That has paid off for older generations: average home prices in Taipei have tripled since 2000, according to one index.
Buyers today are unlikely to benefit in the same way. Taiwan’s population is shrinking, and foreigners are investing less in Taiwanese property. That means house prices are likely to fall. “There are already too many houses in Taiwan,” says Liao Ting-hui, who works for an urban-planning advocacy group. Taiwan has over 9m housing units for only about 8m households. One-fifth of homes are empty, according to the latest census. And nearly a quarter of properties built in the past five years are unoccupied. Wealthy buyers are hoarding empty flats, says Mr Liao.
The government has done little to stop such behaviour. Property owners pay higher taxes if they own four or more units, but the amounts they owe are puny. Taxes are calculated according to government-assessed land and building values that are decoupled from market prices and undervalued (as the methods of calculation have not changed for decades). The owner of a $900,000 house pays less in taxes than the owner of a $20,000 car, according to calculations by one think-tank.
Adjusting the tax system would be unpopular. Instead Taiwan’s government has focused on providing rent subsidies and social housing. In 2023 it also expanded a housing-loan programme for first-time buyers. That caused a spike in both prices and sales. Many young Taiwanese jumped into “crazy panic buying”, says Mr Liao. The central bank had to tighten credit controls last year. Since then sales have slowed. Meanwhile, young Taiwanese face an insecure rental market with few protections. Last year an index of rental prices in Taiwan hit an all-time high. ■