House prices up by 12.53% during the year to Q3 2022

Nationwide real house prices rose strongly by 12.53% in Q3 2022 from a year earlier, up from the previous year’s 7.36% growth and its best showing since Q1 2014. Quarter-on-quarter, house prices increased by 3.18% during the latest quarter.

The housing market slowed in recent years, after dramatic government measures to curb speculative house purchases. It started to gain momentum again starting the second half of 2020, despite the Covid-19 pandemic. 

Demand remains stable despite market-cooling measures

In Q3 2022, property transactions in Taiwan’s six major cities – Taipei, New Taipei, Taoyuan, Taichung, Tainan and Kaohsiung – rose slightly by 0.5% y-o-y to 55,990 units, based on government figures. In the first three quarters of 2022, transactions totaled 187,495 units, down by 1.4% from a year ago, amidst the introduction of market-cooling measures. 

To prevent speculative buying, the government unveiled amendments to the Income Tax Act recently, which came into force on July 1, 2021. Under the new regulations, a tax of 45% will be paid on gains from the sale of property within two years of purchase and 35% for gains made after two years. Moreover, the central bank also imposed a fourth round of selective credit controls in December 2021 to slow the housing market. In recent months, the central bank has also been raising its key interest rates, resulting to a surge in borrowing costs.

Rents, rental yields: amazingly low yields in Tapei at 1.57%

Taiwan: city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Taipei $853,440 $1,117 1.57%

Recent news. Taiwan’s economy grew by 4.01% year-on-year in Q3 2022, following annual expansions of 2.95% and 3.87% in the previous two quarters, primarily buoyed by strong private consumption, according to the country’s national statistics agency. On a seasonally-adjusted quarterly basis, the economy expanded by 1.83% in Q3 2022.

Recently, the Directorate-General of Budget, Accounting and Statistics (DGBAS) downgraded its 2022 growth projections for Taiwan for the third time to 3.06%, from its August growth estimate of 3.76%. During 2021, the Taiwanese economy grew by 6.28%, its fastest pace in more than a decade, mainly driven by strong tech exports during the Covid-19 pandemic to support people working and studying from home as well as improved consumer confidence.