Taiwan’s low wages and high housing prices make young people unable to buy houses and dare not have the next generation, leading to a vicious circle of Population Ageing and M-Form Society.
Taipei Taiwan (Merxwire) – According to the 2019 Global Price to Income Ratio (PIR) data, Taiwan’s house price ranks third in the world, with a PIR of 28.91, which means that 30% of the annual income is used to cover accommodation. Buying a house in Taiwan has a heavier burden than neighboring South Korea, Japan.
Geographical Conditions of Taiwan
With a total area of 36,188 square kilometers, Taiwan is only 394 kilometers from the south end to the north end. It is a long and narrow island; the terrain includes mountains, hills, basins, terraces, and plains. Nearly 2/3 of them are mountainous. There are 268 mountains above 3000 meters, and the flat land suitable for a living is limited. Most of the Taiwan population lives on the west side of the island in six municipalities: Taipei, New Taipei, Taoyuan, Taichung, Tainan, and Kaohsiung.
House prices in the north are high
There are 23 million people in Taiwan, and the population density is very high. According to statistics from Taiwan’s Ministry of the Interior, Taipei City is the most prosperous city in Taiwan, with 9,605 people living per square kilometer. As a result, housing prices and rental prices in Taipei City are the most expensive in Taiwan. Many people want to go to Taipei to work but cannot afford the expensive housing prices. They can only increase their commuting time and live in the surrounding New Taipei City, driving the housing prices in Taipei City and New Taipei City to increase year by year.
Young people cannot afford a house
Take Taipei, the most prosperous city in Taiwan, as an example. The average price of a new house in Taipei is as high as TWD 258,000/square-meter, but the average regular wage of each industry is only TWD 41,883/month. There is too much difference in the ratio of wages to housing prices, and the double career family cannot afford to buy a house too. Therefore, young people in Taipei can only rent houses, and the rent is usually as high as 1/3 of their wages. After deducting other living expenses, there is no money to save.
Young fear of the future
Most young people like to go to big cities to seek their dreams. Taipei City has more job opportunities and more salaries than in other cities, but accommodation and living expenses are expensive. Young people work hard, hoping for recognition and better positions, but the future is unknown. Most young people can only afford the rent of one person, and they dare not get married and are afraid of giving birth to the next generation.
The problem is spreading
Capable people have bought houses in various cities. They rent these houses to young people and use their rental income to repay the loan for buying houses. As a result, housing prices and Vacant rates have become higher, making it more difficult for young people to buy houses. M-Form Society is becoming more and more severe, rich people are getting richer, and those without money are getting poorer.
Serious Vicious circle
Young people dare not give birth to the next generation. There are fewer children and more and more elderly people. In the future, every youth will have to bear more elderly people, which will increase the dependency ratio. This is a serious Vicious circle. The whole world is facing the problem of an Population ageing! If young people are already very difficult in their current lives and cannot afford taxes and possible long-term care in the future, young people in Taiwan need to find survival before they become poor.