Taiwan Real Estate: Prices Continue to Rise Despite Regulations... Concerns Over Market Reshaping Toward 'Cash-Rich' Individuals

In Taiwan, where massive capital is flowing in due to the recent semiconductor boom, the imbalance in the real estate market is intensifying. Although the Taiwan Government is implementing strong loan regulations to suppress rising housing prices, analysis suggests that these measures have failed to lead to a decline in prices and are instead reshaping the market around wealthy asset holders.

Transaction Volumes Plummet Due to Loan Regulations, but Housing Prices Still 'Soar'

According to a video from Dr. Choi Jun-young's 'Globe Research Institute', the Taiwan Government has been implementing the 'Seventh Round of Real Estate Regulations' since the second half of 2024, with the core focus being loan restrictions on multi-homeowners. Through administrative guidance to the banking sector, the Central Bank of the Republic of China (Taiwan) is inducing stricter loan screenings, reductions in LTV, and restrictions on investment loans.

In particular, this regulation is characterized by not recognizing a grace period (a period where only interest is paid without principal repayment) when multi-homeowners take out mortgage loans. While those without homes can utilize a grace period of about 5 years, multi-homeowners must begin repaying the principal immediately after the loan is executed. Furthermore, the intensity of regulations has been increased, such as limiting the LTV to a low level of 30% when a multi-homeowner purchases an additional house.

Due to the impact of these regulations, housing transaction volumes in major cities, including Taipei, have decreased sharply. The video reported that the number of housing transactions in 2025 recorded its lowest level since 2013, and the proportion of mortgage loans also fell to a historic low of 34%. However, housing prices did not fall. Housing prices, which were approximately 24 million won (646,000 Taiwan dollars) per pyeong in 2015, rose to approximately 33 million won (839,000 Taiwan dollars) per pyeong in 2025. It is evaluated that while the regulations may have caught the transaction volume, they were insufficient to drive down prices.

Market Seeing Increase in 'All-Cash Deals,' Controversy Over Policy Mismatch

As the threshold for loans rises, the proportion of 'cash transactions' is noticeably increasing in the Taiwan real estate market. The proportion of all-cash purchases, which was at the 10–20% level in the past, has recently increased to 20–30%. From the sellers' perspective, there is also a tendency to prefer quick transactions with cash buyers by offering a price discount of about 4–5%, rather than dealing with the hassle of waiting for loan approval. Consequently, it is pointed out that a market environment is being created that is advantageous to asset holders with cash rather than ordinary citizens who find it difficult to obtain loans.

Regarding the reason why housing prices are not falling, opinions are divided between those who claim rising construction costs and those who point to excess demand. According to the video, while construction costs rose by about 25% between 2015 and 2023, housing prices surged by a national average of 50% during the same period, and even more in major cities like Taipei. Accordingly, some economists criticize that the rise in construction costs cannot be a sufficient basis for the surge in housing prices.

Furthermore, controversy is being raised regarding a 'mismatch' where the Taiwan Government's policies are conflicting with each other. This is because while the government is tightening loans for multi-homeowners, it has also introduced a policy since 2023 to support low-interest loans (5-year grace period, 40-year maturity) at about half the market interest rate (2.5%) to help young people purchase homes. As regulations to suppress demand coexist with policies to promote demand through low interest rates, concerns are arising that if an expansion of supply is not supported, it could stimulate housing prices again.