People advised to rent, not buy

MORTGAGE PAYMENTS:Taipei’s house price-to-income ratio is about 17, so it would take about that many years to pay off a loan with no other expenses

Staff writer with CNA

Minister of the Interior Yeh Jiunn-rong (葉俊榮) yesterday encouraged young people to consider renting a home first if they cannot afford to buy, saying that such a choice would allow them to invest more in their quality of life and their children’s education.

Yeh offered the advice in an interview on Yahoo TV Live when asked about the problem of young people being unable to buy homes because of low salaries and high property prices.

Saying that the home ownership rate in Taiwan is about 80 percent, Yeh added that most young couples about to get married take out a mortgage, which could be a heavy financial burden due to low salaries.

Instead, young people should start by renting a home so that they can direct their resources to enhancing their quality of life and their children’s education, he said.

To address high housing prices, the government has been pushing a public housing program that would make available a large number of affordable rental units, particularly to young people, Yeh said.

Taipei’s house price-to-income ratio is estimated at between 15 and 17, meaning that it would take an average income earner about 16 years to pay off a mortgage if they had no other expenses, according to a 2015 report issued last year by a housing and real-estate broker.

The average household in Taipei spends two-thirds of its income on mortgage payments, well above the affordable limit of 30 percent, the report said.