The housing price affordability in the fourth quarter of 2019 shows slight fluctuation and long-term improvement continues.
On May 11, the Ministry of the Interior released the housing price affordability index for the fourth quarter of 2019. In particular, the national loan burden ratio was 35.15%, an increase by 0.42% compared to the previous quarter but remained the same when compared to the same quarter of the previous year. The housing price affordability fell under the “slightly low” level; the housing price income ratio was 8.58 times, an increase by 0.11 times compared to the previous quarter and remained the same when compared to the same quarter the previous year. Based on long-term observations, despite the increase in the loan burden ratio this quarter compared to the previous quarter, it remained the third lowest since 2016. The housing affordability showed the trend of gradual increases.
According to the Ministry of the Interior, the housing price affordability index is reference to two indicators: loan burden ratio and housing price income ratio, which are used to measure the degree of housing price affordability. That is, the lower the value, the higher the affordability. It is computed based on the relationship between the median of the housing prices for the quarter and the median of income. The median of the housing prices this quarter rose compared to that of the previous quarter, resulting in the upward trend of the loan burden ratios and housing prices.
The Ministry of the Interior further explained that the larger the proportion of the loan burden ratio in the housing price burden affordability index, the lower the housing price affordability. Housing price affordability levels are divided into four degrees in proportion to “reasonable affordable,” “slightly low,” “relatively low” and “excessively low.” Browse and search on the website: (https://pip.moi.gov.tw/V3/E/SCRE0105.aspx)