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Dilemma of Housing Demand in Taiwan

Author

Listed:
  • Chin-Oh Chang

    (National Chengchi University)

  • Shu-Mei Chen

    (Kun Shan University)

Abstract

This paper discusses the contradicting phenomenon of housing demand in Taiwan. First, an introduction is given on the three primary characteristics of the housing market in Taiwan, which are a high housing vacancy rate, high housing prices and high home ownership. Secondly, we explore the motivation and preferences behind housing purchase. Since the housing price-income ratio continues to increase, unaffordable housing prices cause households to suffer from poor quality of life. The issues of housing justice are highlighted. Recently, the demographics and social values have rapidly changed. Therefore, even if homebuyers face unaffordable housing prices, they still prefer to buy housing instead of renting due to the traditional cultural belief that ¡§to have land is to have wealth¡¨. This has resulted in the phenomenon with high home ownership rate yet high housing prices. On the other hand, the low holding cost of housing and imbalance in urban and rural development perpetuate the high housing vacancy rate in the housing market. This results in an unhealthy housing market and misallocation of resources. Finally, recommendations for related government policy making are made based on the findings.

Suggested Citation

  • Chin-Oh Chang & Shu-Mei Chen, 2018. "Dilemma of Housing Demand in Taiwan," International Real Estate Review, Global Social Science Institute, vol. 21(3), pages 397-418.
    • Handle: RePEc:ire:issued:v:21:n:03:2018:p:397-418
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    References listed on IDEAS

    as
    1. Hsiao-Jung Teng & Chin-Oh Chang & Ming-Chi Chen, 2017. "Housing bubble contagion from city centre to suburbs," Urban Studies, Urban Studies Journal Limited, vol. 54(6), pages 1463-1481, May.
    2. Chin-Oh Chang & Shu-Mei Chen & Tsur Somerville, 2003. "Economic and Social Status in Household Decision-making: Evidence Relating to Extended Family Mobility," Urban Studies, Urban Studies Journal Limited, vol. 40(4), pages 733-746, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Klaas Kresse & Erwin van der Krabben, 2021. "Housing Supply Limitations, Land Readjustment and the Ecological Performance of the Urban Landscape," Sustainability, MDPI, vol. 13(17), pages 1-24, August.
    2. Cheng-Hong Yang & Borcy Lee & Yu-Da Lin, 2022. "Effect of Money Supply, Population, and Rent on Real Estate: A Clustering Analysis in Taiwan," Mathematics, MDPI, vol. 10(7), pages 1-17, April.

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    More about this item

    Keywords

    Housing Demand; Taiwan; Housing Price; Housing Vacancy Rate; Home Ownership Rate;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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