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Urban land prices continue to fall; Taipei sees steepest drop

2017/07/15 15:54:34

Taipei, July 15 (CNA) Land prices in the urban areas of Taiwan continued to fall as the local property market remained in the doldrums with Taipei, the capital, seeing land prices fall at the steepest rate, statistics released by the Ministry of the Interior (MOI) showed Saturday.

According to MOI data, the urban land price index, which serves as one of the important indicators of the local property market, fell 0.49 percent during the period of Oct. 1, 2016 to March 31, 2017 from six months earlier.

The data was from the second consecutive semi-annual report. An earlier report showed urban land prices declining 0.35 percent from April 1 to Sept. 30, 2016.

The latest land price drop was the steepest since 2010, the MOI said.

Taipei, the most closely watched property market in Taiwan, suffered the largest fall of 1.53 percent, the data showed.

In response to the data, the Taipei City Government said that Taipei has plenty of old buildings which are located in districts failing to impress home buyers due to their relatively inconvenient transportation links and a lack of infrastructure construction. As a result, the city government said that the city's overall land prices were dragged down at a faster pace.

Among the other five major cities in Taiwan, land prices in New Taipei City, the most populous city in the country, fell 0.30 percent during the six-month period, while a 0.48 percent fall was recorded in Taoyuan City, and a 0.22 percent drop was seen in Taichung City, the data showed.

Tainan and Kaohsiung cities, however, bucked the downturn, registering a 0.90 percent increase and a 0.30 percent rise during the same period, respectively, according to the MOI.

Following Taipei, the offshore Lienchiang County recorded the second largest fall of 1.35 percent in land price during the same period.

The data showed that the outlying Kinmen County enjoyed the largest increase of 1.36 percent in land prices in the six month period, ahead of Taitung County (1.32 percent) and Yilan County (1.18 percent).

Commenting on the report, the Kinmen County Government said that the increase in land prices reflected the county's efforts to develop its tourism industry, which has created jobs and energized business activity, which in turn boosted the property market.

The MOI said that during the six-month period, the number of land transaction deals in Taiwan totaled 239,240, up 2.47 percent from six months earlier, but down 8.25 percent from a year ago.

Meanwhile, another report also released by the MOI showed that the average ratio of home mortgages to average total household income in Taiwan hit 38.04 percent in the first quarter of this year, which means salary earners had to use nearly 40 percent of their earnings to repay home loans.

But the latest ratio was lower by 0.30 percentage points from the fourth quarter of last year.

On average, in the first quarter, home prices in Taiwan were 9.24 times the salary of income earners, the data showed. That means that to afford a home, they would have to not spend any of their annual income for more than nine years. That indicates buying a home remains out of reach for many Taiwanese.

(By Hsieh Chia-chen, Cheng Cheng-wei and Frances Huang)