COST OF LIVING/Rent index growth in 2023 hits 27-year high

Taipei, Jan. 8 (CNA) Taiwan's rent index rise in 2023 hit a 27-year high, putting more financial strain on consumers, with analysts saying the uptrend is likely to continue as demand carries on outpacing supply.

Data released by the Directorate General of Budget, Accounting and Statistics (DGBAS) on Friday showed the local rent index in the living cost category rose 2.16 percent from a year earlier to 103.88, the highest rise since 1966, when the index moved higher by 2.52 percent.

Due to rising rents, the living cost index as a whole rose 2.04 percent from a year earlier in 2023, hitting an all-time high of 104.35, according to the DGBAS.

In 2023, Taiwan's consumer price index (CPI) rose 2.50 percent, the second highest level in 15 years, behind only the 2.95 percent increase in 1996, and well above the 2 percent alert set by the central bank. That rise was even higher than an estimate of 2.46 percent made in November.

From 1997 to 2022, the rent index grew between negative 0.99 percent (2003) and positive 1.43 percent (1998), according to the DGBAS.

Rent growth in 2023 contributed 0.33 percentage points to the CPI growth and the living cost index boosted it by 0.48 percentage points, indicating rent increases played a significant role in rising living costs and the overall CPI rise, the DGBAS data showed.

Tseng Ching-der (曾敬德), a research manager with Sinyi Realty Inc., told CNA that rent index growth had topped 2 percent every month in 2023 due to an imbalance in demand and supply.

Tseng said demand is likely to continue to outstrip supply, meaning he did not expect the rent index to fall anytime soon. He urged tenants to take advantage of subsidies to ease the financial burden.

It was the second consecutive year the living cost index rose by more than 2 percent, and along with rising house prices, there is little doubt inflationary pressure caused many to feel the financial pinch.

Citing last year's relatively high comparison base, the DGBAS said inflation in 2024 is expected to moderate quarter by quarter.

The CPI rise is likely to fall below 2 percent by the second quarter of 2024, the DGBAS said, citing its forecast of a 2.43 percent rise in the first quarter, 1.81 percent in the second, 1.42 percent in the third, and 0.93 percent in the fourth, the DGBAS said.

According to the DGBAS forecast made in November, Taiwan's CPI growth is expected to moderate to 1.64 percent in 2024, below the 2 percent alert.