Taiwan Real Estate: Asia’s Most Overpriced?

Last updated July 18th, 2024.

Let’s be frank: buying property in Taiwan isn’t a good way to make returns at all.

Either way, we’ll still talk about the real estate market here in Taipei and elsewhere in Taiwan. Hopefully it serves as a solid example of somewhere you shouldn’t invest.

We already wrote about the most expensive places in Asia for buying real estate along with the cheapest ones.

Criteria like those are fine if you merely want to know which countries are within your price range. You almost certainly have some sort of investment budget whether it’s large or small.

But judging real estate markets by their affordability (or lack thereof) doesn’t tell you anything about their potential for return. As investors, we’re much more interested in overall value – not simply a price tag.

For example, Hong Kong has ranked among the priciest markets on the planet for more than a decade, yet apartment values keep increasing nonetheless.

Likewise, Cairo is one of the least expensive cities. Yet massive amounts of oversupply in the suburbs is causing stagnant prices and a weak outlook. It’s a long distance away from Taipei but shares the same problem.

Of course, we’re looking at Taiwan today. There is very little profit left in the island’s real estate sector despite boasting a fairly strong economy in general.

Property in Taiwan is a Bad Investment

Taiwan does have many positive aspects that could be attractive to foreign investors… at least on paper.

Besides Macau, it’s the sole territory in the entire Chinese sphere of influence where foreigners can own freehold property. Doing business in Taiwan is easier compared to most places in the region too.

With all that said, real estate prices are completely out of touch with reality. Buying property in Taipei costs around US$7,000 per square meter (US$650 per square foot).

That means a rather modest 100sqm, two-bedroom house or apartment for sale in Taipei will set you back US$700,000.

The average Taiwanese citizen makes just over US$1,500 a month though. In other words, you would have to work for almost 40 years to afford a small apartment!

Not only that, but rental yields in Taipei are absolutely abysmal at about 2%.

That’s the lowest of all countries in Asia, and likely the housing market’s reaction to local Taiwanese not being able to actually afford property in Taiwan.

Quite frankly, rental prices must be low… or else everyone would be homeless.

Hong Kong and Singapore have managed to keep their expensive real estate values despite similarly low-yields and unaffordability to locals.

Yet they’re also both major global financial centers, are highly developed, and have a scarcity of land that Taiwan’s housing market doesn’t.

Buyers from mainland China are propping up prices in Taipei. However, with Beijing’s preventing their citizens from investing offshore, severely limiting Taiwan of its key growth factor, the situation is dire.

For all these reasons, Taiwan’s property market is practically begging for a correction. Chinese investors from the mainland won’t continue supporting demand much longer with their own economy now struggling.

You probably shouldn’t buy a house, apartment, mansion, or any other type of property in Taiwan.

Taiwan is prone to natural disasters such as earthquakes and flooding. By comparison, it makes Southeast Asia looks safe.

Don’t Invest in Taipei: Consider This Instead

We don’t want to be the bearers of bad news if you were thinking about buying real estate in Taiwan. Here are a few alternatives for your consideration.

Malaysia’s urban areas are growing at a notably quicker pace than Taipei or Kaohsiung, and it’s at roughly the same stage of economic development.

Furthermore, it’s practically the only country in Southeast Asia where foreigners can own land rather than just apartment units. You can buy anything from a condo unit to a huge mansion.

Prices in Malaysia’s capital city of Kuala Lumpur are a mere fraction of Taipei’s. You can find real estate costing below US$4,000 per square meter.

Meanwhile, you might want to consider investing frontier markets if your primary goal is to make returns.

Cambodia ranks among Asia’s least expensive places to buy luxury apartments, or really any type of home for that matter.

You might consider it as a higher-growth, far cheaper alternative to buying a property in Taiwan.

While Cambodia is one of the region’s poorest countries, its strong GDP growth in excess of 7% annually, reasonable prices, and ongoing demographic boom means you’ll find a lot investment potential.

On the most expensive end of the cost-spectrum, Singapore is one of the world’s priciest cities to own property. Yet it’s barely more expensive than housing in Taipei.

Singapore is also Asia’s top financial hub, has less available land supply, and enjoys better living standards than Taiwan does.

The city’s rental yields, economic growth, and potential for capital appreciation in each of these countries are superior compared to buying an apartment in Taipei, Taichung, or anywhere else in Taiwan.

In fact, all three of the countries mentioned further above in this section will provide you with better investment potential than Taiwan. Not just with regards to appreciation and rental yields, but also natural disaster and geopolitical risk.

Taiwan is a bustling, dynamic island with many opportunities outside of its real estate sector. But you should consider your options carefully before “investing” somewhere just because you personally like the place.

Want to learn about other markets you should probably avoid? Taiwan isn’t the only place in the region where you shouldn’t invest.

You might be interested in our article about the four worst countries for investors in Asia.

FAQs: Taiwan Real Estate