Victoria Weng, 30, is determined to stay in the leafy Taipei suburb she grew up in. She remembers walking to school with her sister here. Many of her friends live in the area. And as a flight attendant, she works at Taipei International (Songshan) Airport just around the corner.
“I don’t think I can imagine living anywhere else,” she said, walking among the small boutiques and independent coffee shops that line the streets of the Minsheng Community, a former enclave planned by the U.S. military. “To me, being in Taipei City near this location is the most important consideration I have.”
That wish finally came true last November when she managed to purchase a studio in a newer development just down the road from her parents’ three bedroom apartment. She had moved quickly; the unit was just one of the few to hit the market in recent months.
The studio, which at 238 square feet (or 6.6 ping) is just large enough for a bed, a couch and a kitchenette, cost her NT$10.7 million (US$355,000). Another NT$200,000 was spent furnishing the place and buying furniture from IKEA. “The costs,” she said, were expected. “This is the reality of how things are if you want to live in Taipei City.”
The housing crisis in Taipei is a relatively new phenomenon. Prices have tripled since 2001, roughly the time frame during which wages have stagnated for the vast majority of the workforce. And the city recently surpassed Hong Kong as number one globally in the unaffordability of housing.
In a city of mostly aging concrete tenement buildings, housing prices have reached an average of NT$675,000 per ping (US$630 per square foot) or 15.01 times the average household income, buoyed by soaring returns on property speculation and low interest rates.
The squeeze has been perhaps the toughest on younger people, who are struggling to make ends meet amid slumping salaries and rising commodity costs. Those who do manage to move out are confronted with the facts: windowless rooms, sublets, basement units, or like in Victoria’s case, a 238-square-feet unit for a price that would have once bought a luxury three bedroom apartment.
Victoria Weng’s studio in Minsheng Community. Photo: Vincent Y. Chao, Thinking Taiwan
Although rents are more affordable, most professionals her age can still only afford to let studios or small one-bedroom units, which go for roughly NT$18,000 a month, excluding bills and maintenance. Average incomes for 30 to 34 year-olds have remained at the same NT$52,000 per month since a decade ago.
All of this means that young people today are having a harder time doing what most of their parents did a generation earlier in the city: buying an apartment, getting married, and having children.
“Most of my friends are being priced out of Taipei City. Instead, they are moving to New Taipei City or Taoyuan County, where they can find an apartment for maybe half the cost. But it’s not just rent or housing prices. Everything is just more expensive here, even the food,” said Victoria. “It’s hard to think about marriage or children.”
Since 2012, the government has attempted to build through the private-sector ‘suitable housing’ for young and low-income people. Two such communities with thousands of units, of which a percentage will be set aside for rentals only, are located in Linkou and Banciao on the peripheries of New Taipei City.
But being almost an hour away from central Taipei, some are skeptical whether the projects will succeed, as they will cut young people off from the social life and culture of the city where they work and play. The long commute is also a factor in whether or not to move, especially in Linkou, given that a promised MRT system has been delayed for another year.
Chester Lai, for example, purchased an apartment in a new building in Linkou last spring. The unit provides roughly 996 square feet in floor space over two-stories and cost him NT$12.5 million (US$415,000), with payments starting at NT$34,590 a month over 30 years. Despite the handover last March, that apartment has remained empty and unfurnished.
“I added up the costs of commuting every day, including fuel and parking fees. It just wasn’t worth it in the end,” Chester, 32, said at a sublet he shares with three journalists he works with near an MRT station in Taipei’s suburban Wenshan District. He’s now thinking about selling the unit and looking for something closer to central Taipei.
Even as housing in Taipei becomes, in most cases, an unattainable luxury for much of the capital’s youth, some developers are betting that prices could rise higher still. All around the city, construction canes still dot the cityscape. But few of these new apartments are being built to be affordable.
Of the 21 major developments being sold in the city, only three fall below NT$700,000 per ping (US$650 per square foot), according to housing website Rakuya, still far above any threshold of affordability. Most were priced instead between NT$900,000 and NT$1.2 million per ping, almost double the current average housing prices.
This is compounded by growing interest in the property market from overseas Taiwanese, expats returning from China, as well as, worryingly for some, Chinese investors, despite efforts by the government to rein in property spending and cool the market.
Just a few doors down from a marble clad development that sells for over NT$120 million per unit, Brandin Yang, 26, a score composer and a small business owner, is one of the residents of a small windowless studio. In the daytime, he manages the Libratory, a used bookstore near Shida that is one of Taipei’s commercial hubs.
And at night, he also helps manages the digital media campaign for Ko Wen-je (柯文哲), a candidate for Taipei City mayor.
“It’s convenient. There are lots of midnight snacks and places to drink downstairs,” he said of his studio on the second floor of a building located near Linsen N. Rd., the heart of Taipei’s red light district. Before he goes to sleep, he wears headphones to block out the sounds from next door. “I have a lot of interesting neighbors.”
Under 30 year-olds in the city make, on average, NT$43,000 a month, and Brandin’s rent is within the limits of what would be considered acceptable. But while he pays around NT$10,000 a month, including utilities, for his windowless studio, elsewhere in Taiwan that same amount could have been enough for a large two bedroom apartment.
The high costs of property in Taipei also hurt Brandin in other ways. On top of everything else, he has to pay a total of NT$27,000 a month to rent the underground space for his bookstore. That amount, after much argument with his landlord, is expected to go up another NT$2,000 this year.
“I don’t think that Libratory can survive another rent increase. We only manage to make a small margin on the books, everything else is provided for free,” he said, referring to a reading room and open space to hold gatherings and events. Already, a number of independent bookstores, most much bigger, have disappeared from the area.
All of this is changing the social fabric of how young people were once expected to behave.
Victoria’s sister Mandy, a 25 year-old travel agent, for example, having taken over her sister’s bedroom, refuses to move out from home. In fact, she isn’t even considering it. “I’ll wait for the housing market to collapse in a couple of years. Otherwise, how can I even afford to rent a place?”
Victoria, now the owner of NT$10.7 million property, disagrees. An example of the difficulties that Taipei has encountered in combating housing prices, she now has too much riding on the property market for her to want it to collapse, or even to cool down. “I hope that prices will continue to increase.”
“This way I might be able to trade it in for something larger in the future.”
Vincent Y. Chao is an assistant editor at Thinking Taiwan and works for the Thinking Taiwan Foundation.
Edit: An earlier version of this article erroneously stated Brandin’s rent to be NT$13,000 and NT$20,000 for his bookstore. The correct amounts are NT$10,000 and NT$27,000, respectively.