will there be a drop in housing prices?

Moderators: Tempo Gain, TheGingerMan

Forum rules
We hope that the Living in Taiwan forum will be of value to you and others. To ensure this, please note:

It is best to capitalize topics and to avoid vague titles. “Hi, I’m new” and “Help please” are examples of bad titles.

Before posting, please check the FAQ thread, and – more importantly – use the search function to ensure that your topic has not been discussed before and that there is not an existing thread you could update with your contribution.

While Living in Taiwan is a busy, wide-ranging forum, there are other specific forums for relationships, teaching, business, legal issues, animals, food, events, travel, restaurants, and so on. Check the Forumosa menu to find the most appropriate place for your post.

While it is preferable to post questions dealing with dissimilar topics in separate threads (“How Much for an Apartment in Tianmu?”, “Are There Many Foreigners in Tianmu?”), if you are a new arrival, it is possible to present numerous questions in one post, but realize that your thread will then, after two weeks, be merged into the New to Taiwan: Some Questions thread.

Re: will there be a drop in housing prices?

Postby *monkey* » 26 Apr 2012, 15:16

GC Rider wrote:
*monkey* wrote:I had spent almost NT$1 million on rental expenses before I got my own place. I sorely wish I could do it all over again, only putting that NT$1 million into home equity and not into some greedy landlord's pocket.


Why is the landlord greedy just because he wants you to pay rent? He's probably just a smart investor.


I suppose so, if a smart investor is someone who sits on his fat ass watching TV all day while other people pay his mortgage installments.
Floggings will continue until morale improves

Monkey's portmanteau of the day: Scootard
Forumosan avatar
*monkey*
Wild Chicken Bus Driver (yě jī chē sī jī)
Wild Chicken Bus Driver (yě jī chē sī jī)
 
Posts: 1945
Joined: 29 Aug 2001, 16:01
Location: Taipei, Free China
4 Recommends(s)
61 Recognized(s)



Re: will there be a drop in housing prices?

Postby GC Rider » 26 Apr 2012, 15:22

*monkey* wrote:
GC Rider wrote:
*monkey* wrote:I had spent almost NT$1 million on rental expenses before I got my own place. I sorely wish I could do it all over again, only putting that NT$1 million into home equity and not into some greedy landlord's pocket.


Why is the landlord greedy just because he wants you to pay rent? He's probably just a smart investor.


I suppose so, if a smart investor is someone who sits on his fat ass watching TV all day while other people pay his mortgage installments.

Yep that's the exact definition. You might replace TV with iPad though. :D
GC Rider
Chair-throwing Legislator (rēng yǐzi de lìfǎ wěiyuán)
Chair-throwing Legislator (rēng yǐzi de lìfǎ wěiyuán)
 
Posts: 391
Joined: 30 Oct 2009, 22:43
22 Recommends(s)
21 Recognized(s)



Re: will there be a drop in housing prices?

Postby bismarck » 26 Apr 2012, 23:38

GC Rider wrote:
*monkey* wrote:I had spent almost NT$1 million on rental expenses before I got my own place. I sorely wish I could do it all over again, only putting that NT$1 million into home equity and not into some greedy landlord's pocket.

Why is the landlord greedy just because he wants you to pay rent? He's probably just a smart investor.

Or, according to our man GiT, possibly a not so smart "investor". Therefore probably rather ungreedy, perhaps stupid. :2cents:
Image
World Champions 1995, 2007; Tri-Nations champions 1998, 2004, 2009; Grand Slam Champions 1912/13, 1931/32, 1951/52, 1960/61; Defeated British & Irish Lions 1903, 1924, 1938, 1962, 1968, 1980, 2009
Image
Super 14 Champions 2007, 2009, 2010
Don't talk to me about naval tradition. It's nothing but rum, sodomy and the lash.
Sir Winston Churchill

Second of all, as in all honeymoons, all is well until it is not. It is until the unexpected happens that you will see all grievances surface -ask anyone in any relationship. The girl can chew with her mouth open, that if you love her, you do not care. If you do not lover her, if her pinkie toe is half an inch deviant, the relationship is doomed. - Icon
Forumosan avatar
bismarck
Maitreya Buddha (Mílèfó)
 
Posts: 11605
Joined: 07 Jan 2005, 04:44
Location: Tainan City 台彎, 台南
150 Recommends(s)
141 Recognized(s)



Re: will there be a drop in housing prices?

Postby GuyInTaiwan » 27 Apr 2012, 09:11

bismarck: That's right. I'm not saying that investing in real estate isn't a good thing. What I am saying is that it is not always a good thing. It's highly overrated, as proven by the fiascos in the U.S. and several European nations.
And you coming in to scold us all like some kind of sour-puss kindie assistant who favors olive cardigans and lemon drinks without sugar. -- Muzha Man

One sometimes gets the impression that the mere words "Socialism" and "Communism" draw towards them with magnetic force every fruit-juice drinker, nudist, sandal-wearer, sex-maniac, Quaker, "Nature Cure" quack, pacifist, and feminist in England. -- George Orwell
GuyInTaiwan
Entering Second Childhood (èrdù tóngnián qī)
Entering Second Childhood (èrdù tóngnián qī)
 
Posts: 7231
Joined: 10 Jun 2008, 23:01
341 Recommends(s)
273 Recognized(s)



Re: will there be a drop in housing prices?

Postby suntex01 » 27 Apr 2012, 12:59

GuyInTaiwan wrote:bismarck: That's right. I'm not saying that investing in real estate isn't a good thing. What I am saying is that it is not always a good thing. It's highly overrated, as proven by the fiascos in the U.S. and several European nations.


I have to disagree. I think the problem in US and Europe was that people didn't draw a clear line between investment, and a home.
An investment is something you try to make as much money as possible while spending the least. While on a home, you shouldn't expect to make any money out of it. But in both US and Europe, people used their own home like an atm and investment. They either poured too much money into it, hoping to get a huge return, or took too much from line of equity, thinking the value will stay up. They crossed the line between owning a home, and making an investment, a big no-no in my opinion. So when wanting to purchase real estate, one should ask themselves, whether or not they want it as a home to live in, or an investment. Because you can't have both...it doesn't work that way.

I for one believe people should own their home, but whether or not everyone should buy real estate for investment, is a different story.

This post was recommended by Icon (27 Apr 2012, 13:38)
Rating: 5.88%
suntex01
Memorized My Password (gāng jìhǎo zìjǐ de mìmǎ)
 
Posts: 43
Joined: 10 Sep 2011, 00:12
1 Recognized(s)



Re: will there be a drop in housing prices?

Postby Omniloquacious » 27 Apr 2012, 15:00

I will find it hard going back to living in someone else's house if I do decide to rent for a while after selling my present home (if I can sell it). I never minded renting before I bought my first place here, but it really does feel so much better to live in a place of your own and be able to do whatever you want and can afford to do with it.

On the subject of property values: I read a report yesterday that said housing prices in Spain have commonly fallen to just one quarter of their level at the height of the property boom four years ago. Moreover, given the disastrous state of the Spanish economy, the extremely high unemployment rate, and the huge oversupply of housing, some well informed commentators are saying prices are almost certain to continue falling, and could end up as low as just one tenth of their peak value. Could the same thing happen in Taiwan? It may be improbable, but it certainly isn't inconceivable.

Of course, however much the value of a house or apartment rises or falls in the market, it doesn't really matter if you have bought it as your home, paid for it in full or are free from risk of being unable to meet mortgage payments, are happy living in it, and have no need or intention to sell it within the foreseeable future. And even if you need to sell it and move, you should still be able to replace it with a similar place at a similar price within the same market. But if you have overstretched your finances taking out a loan to buy it, or if you have bought it purely as in investment, you're going to be feeling very real and very substantial hurt if its value plunges to just a fraction of what you paid for it.
If I prioritized the acquisition of wealth above other purposes in life, I might still have come to Taiwan to study Chinese, but I doubt I would have remained here.
寸金難買寸光陰
Forumosan avatar
Omniloquacious
Retired President (tuì xiū de zǒng tǒng)
Retired President (tuì xiū de zǒng tǒng)
 
Posts: 5645
Joined: 24 Sep 2002, 14:15
Location: The 鳥不生蛋狗不拉屎 wasteland of Linkou
67 Recommends(s)
191 Recognized(s)



Re: will there be a drop in housing prices?

Postby GuyInTaiwan » 27 Apr 2012, 16:04

suntex: I disagree entirely. I don't think everyone should own their own home. There are circumstances when it really makes sense. There are circumstances when it doesn't. Coca-Cola may be a great stock to own, but not for $1,000 a share. Likewise, becoming a dentist may be a great career choice, but not if it puts you $1,000,000 in debt. There is a line for anything you spend money on. On one side of the line, it makes sense. On the other side, it doesn't. Now, we can debate where that line is exactly, but to make a blanket statement that people should do X is irrational. You can never divorce any situation from its financial implications. For many people (perhaps even most), buying a home will be the single biggest financial decision they'll ever make in their lives. To regard this as something that must be done because it's regarded as axiomatic/received wisdom/whatever is going about it the wrong way.

The interesting thing for me about money is that the middle class always want to talk about what to do with money and bandy about the received wisdom. Yet once you actually run the sums, it turns out that sometimes, the received wisdom isn't wise at all. Likewise, once you look at successful people, it's often the case that they took a different route. Furthermore, I'm suspicious of the received wisdom simply because it's followed by the middle class. They're precisely the last people I would ask about money because by definition, they've spent their entire lives striving towards (and achieving) mediocrity. At least the poor don't pretend that they have their shit together.

This sounds extreme, but if you turned up to a gym to get a personal trainer and he was twenty pounds overweight like the average person, you'd be a little suspicious. You wouldn't ask some random dude's dad to teach you to play the piano. You'd be unimpressed if you went to a top restaurant to find me cooking your meal. Yet this is precisely the approach people take to financial advice.
And you coming in to scold us all like some kind of sour-puss kindie assistant who favors olive cardigans and lemon drinks without sugar. -- Muzha Man

One sometimes gets the impression that the mere words "Socialism" and "Communism" draw towards them with magnetic force every fruit-juice drinker, nudist, sandal-wearer, sex-maniac, Quaker, "Nature Cure" quack, pacifist, and feminist in England. -- George Orwell
GuyInTaiwan
Entering Second Childhood (èrdù tóngnián qī)
Entering Second Childhood (èrdù tóngnián qī)
 
Posts: 7231
Joined: 10 Jun 2008, 23:01
341 Recommends(s)
273 Recognized(s)



Re: will there be a drop in housing prices?

Postby suntex01 » 27 Apr 2012, 22:56

GuyInTaiwan:

I agree with you on some levels, hence I didn't use stronger words such as "everyone" or "must". But the problem is that, in the case where the home is rented and not owned, over the lifetime the expense spent on renting alone would amount to a pretty significant amount. It would probably still amount to "biggest spenditure" by most middle class. One way or other it would come back to the same point. Unless you live in Germany or similar countries where there are housing that is subsidized or regulated by the government, cost of renting would most certainly end up being more than a purchase.

Bottom line is, landlords are out there to make money. So besides paying for landlord's holding cost, renters are also paying a premium for landlord's profit. Seriously, unless one is in a situation where they foresee changes within five to ten years, they should seriously consider a purchase within means.

Also, I see your point on financial advices from middle class, hence why I mentioned that there should be a definitively separation between an investment and a home. And that fact is, home is usually the one thing middle class can fall back on in the end, if they don't leverage it.

Back before the whole bubble burst, its startles me everytime I watched the reality shows that show people making huge profits from flipping houses. I kept saying this shit can't keep going on... I had no knowledge of the subprime debacle. But when you see boatloads of people jumping into the same industry and money seemingly flowing out of nowhere, shits' about to happen.

Anyways I have to say, in times like these, unless I get positive cash flow from a real estate investment, I would probably bet my money on commodities...
suntex01
Memorized My Password (gāng jìhǎo zìjǐ de mìmǎ)
 
Posts: 43
Joined: 10 Sep 2011, 00:12
1 Recognized(s)



Re: will there be a drop in housing prices?

Postby Kea » 27 Apr 2012, 23:29

Money will flow into stocks in mid-late Summer. Long term hold.
If Romney wins, Bernanke is out and the Fed may raise interest rates. Housing prices may drop.
A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
- Sir Winston Churchill
Forumosan avatar
Kea
Gravel Truck Driver (suìshí chē sījī)
Gravel Truck Driver (suìshí chē sījī)
 
Posts: 1355
Joined: 24 Mar 2004, 13:29
15 Recommends(s)
35 Recognized(s)



Re: will there be a drop in housing prices?

Postby GuyInTaiwan » 28 Apr 2012, 06:22

suntex01 wrote:GuyInTaiwan:

I agree with you on some levels, hence I didn't use stronger words such as "everyone" or "must".


I think you're not being precise with words then, because you also wrote, "I for one believe people should own their home..." The "people" there does mean "everyone" and the "should" does mean "must".

But the problem is that, in the case where the home is rented and not owned, over the lifetime the expense spent on renting alone would amount to a pretty significant amount. It would probably still amount to "biggest spenditure" by most middle class. One way or other it would come back to the same point. Unless you live in Germany or similar countries where there are housing that is subsidized or regulated by the government, cost of renting would most certainly end up being more than a purchase.


In the majority of cases, yes, people will probably end up paying at least as much in rent. However, there are definitely lots of times (they might only be temporary, say five years) when buying a house would be the wrong thing to do and would lead to paying more over one's lifetime, either because the rent to purchase ratio is completely mismatched, or because someone can buy at the top of a bubble and end up under water, or because interest rates can go through the roof and mortgage payments can become huge.

Bottom line is, landlords are out there to make money. So besides paying for landlord's holding cost, renters are also paying a premium for landlord's profit. Seriously, unless one is in a situation where they foresee changes within five to ten years, they should seriously consider a purchase within means.


Except that not all landlords make money. Not everyone makes money in real estate. Not everyone makes money in any investment. In Taiwan, for instance, there must be lots of landlords who don't make any money, and probably even lose money. They think that's okay on some level for one of two reasons. Either they inherited the property, so they think it's already paid for (though actually losing money is still silly), or they're hoping for capital gains, or both.

Also, I see your point on financial advices from middle class, hence why I mentioned that there should be a definitively separation between an investment and a home. And that fact is, home is usually the one thing middle class can fall back on in the end, if they don't leverage it.


If it's the thing they're going to have to fall back on in the end, then that's all the more reason why it should be a (smart) investment. Being a home and an investment are not necessarily mutually exclusive. Likewise, being a liability and then eventually making more money from capital gains is also not necessarily a bad idea, but it does have to be considered.

One of the major problems I have with owning a home is that most people end up putting far too much equity into it (and by "far too much", that may even mean "any") when they could be getting greater returns elsewhere, which would set them up better for retirement. Why would/should people take the single biggest financial decision of their lives, and something they will probably have to rely upon for their retirement (in which case, yes, it is an investment), and accept middling returns (once the true costs are factored in)? I'm trying to live by a rule of thumb of 75+:20:5, where those three numbers mean a person's respective net worth tied up in investments, a house, and stuff (including a car), though I am actually trying to get the first category much higher than 75 and may end up with zero in the second.

Back before the whole bubble burst, its startles me everytime I watched the reality shows that show people making huge profits from flipping houses. I kept saying this shit can't keep going on... I had no knowledge of the subprime debacle. But when you see boatloads of people jumping into the same industry and money seemingly flowing out of nowhere, shits' about to happen.


I agree, but that's no reason to say that your house shouldn't be thought of as an investment in the long run.

Anyways I have to say, in times like these, unless I get positive cash flow from a real estate investment, I would probably bet my money on commodities...


I wouldn't necessarily do either or neither. I would try to estimate the underlying value of the thing in question, and then look at the asking price for it.
And you coming in to scold us all like some kind of sour-puss kindie assistant who favors olive cardigans and lemon drinks without sugar. -- Muzha Man

One sometimes gets the impression that the mere words "Socialism" and "Communism" draw towards them with magnetic force every fruit-juice drinker, nudist, sandal-wearer, sex-maniac, Quaker, "Nature Cure" quack, pacifist, and feminist in England. -- George Orwell
GuyInTaiwan
Entering Second Childhood (èrdù tóngnián qī)
Entering Second Childhood (èrdù tóngnián qī)
 
Posts: 7231
Joined: 10 Jun 2008, 23:01
341 Recommends(s)
273 Recognized(s)



FRIENDLY REMINDER
   Please remember that Forumosa is not responsible for the content that appears on the other side of links that Forumosans post on our forums. As a discussion website, we encourage open and frank debate. We have learned that the most effective way to address questionable claims or accusations on Forumosa is by engaging in a sincere and constructive conversation. To make this website work, we must all feel safe in expressing our opinions, this also means backing up any claims with hard facts, including links to other websites.
   Please also remember that one should not believe everything one reads on the Internet, particularly from websites whose content cannot be easily verified or substantiated. Use your common sense and do not hesitate to ask for proof.
PreviousNext




Proceed to Living in Taiwan



Who is online

Forumosans browsing this forum: *monkey*, Charlie Jack, Funnytoss, ranlee, shiadoa, stansbox and 8 visitors

Just in case you hadn't noticed, there are other people on the airplane besides you. So don’t clip your toenails, snore with wild abandon, or do any type of personal business under a blanket!
From "13 Things Your Flight Attendant Won't Tell You"