Taiwan's six major cities' rental index hits a 28-year high: Prime locations in Taipei and New Taipei City see annual rent increases of over 10%, creating economic pressure for renters.

In 2024, the annual growth rate of Taiwan's rental index reached 2.56%, reaching a 28-year high, indicating significant changes in the rental market. Taichung City experienced the highest rent increase of 26.47%, while prime areas in both Taipei and New Taipei City saw annual increases of over 10%. The rise in housing prices, land prices, and construction costs has driven up rents, putting economic pressure on renters, particularly on the younger generation. Government measures like the vacant home tax and rental subsidies have not effectively mitigated the rise in rents, and the supply-demand imbalance issue persists.

Rent Rises Across Six Major Cities, Taichung Leads the Increase

According to Professor Li Jia-nong from Chinese Culture University and data from the Directorate General of Budget, Accounting and Statistics, the national rental index in February 2024 reached 108.06, with an annual growth rate of 2.56%, marking a 28-year high. Over the past two years, the rent increases in the six major cities are as follows: Taichung City 26.47%, Taoyuan City 25.94%, Tainan City 23.12%, Kaohsiung City 18.64%, New Taipei City 16.58%, and Taipei City 14.2% [1]. Although the increase in Taipei City is relatively smaller, its rent level remains the highest in the country, with per-ping rent significantly surpassing that of other counties and cities.

Annual Rent Increase Over 10% in Prime Locations of Taipei and New Taipei, Rental Hotspots Concentrated

In Taipei and New Taipei City, the most noticeable rent increases are concentrated in prime locations. In Taipei City, the eastern districts such as Neihu, Nangang, and Xinyi, as well as the inner core areas like Banqiao, Shuanghe, and Sanchong in New Taipei City, all saw annual increases exceeding 10% [1]. These areas, with convenient transportation and comprehensive living amenities, attract a large number of students and workers, making them popular choices in the rental market.

Housing Prices, Land Prices, and Construction Costs Drive Up Rent

Behind the rent increase is the simultaneous surge in housing prices and construction costs. Li Jia-nong pointed out that over the past decade, land prices have risen by about 10% to 20%, and construction costs have increased by 40% to 50%, leading to a 1.5-fold increase in housing prices [1]. Landlords, in an attempt to pass on holding costs, incorporate taxes and construction costs into the rent, further driving up rental market prices.

Lai Zhi-chang, the PR director of a real estate research office, also stated that since the 2020 pandemic, the housing market has entered a major bull market. Although the government has introduced policies such as the empty home tax and rental subsidies, these measures have instead increased landlords' holding costs, indirectly pushing up rent [1].

Renters' Living Space Compressed, Economic Pressure Heavy

In a high-rent environment, renters' quality of life and economic pressure have simultaneously worsened. Take Hannah, a university student in a prime area of Taipei City, for example. She initially budgeted around NT$15,000 (approximately USD 480) per month for rent, but ended up renting a studio for nearly NT$20,000 (approximately USD 640) per month, with actual usable space of only about two pings (approximately 71 square feet), leaving her no choice but to place her shoe rack inside the room [1]. Such rental conditions have become the norm in Taipei City's rental market.

The Directorate General of Budget, Accounting and Statistics noted that the annual growth rate of the rental index in 2024 is 2.56%, the highest since 1996, with a cumulative increase of 8.3% over four years [1]. However, salary growth has not kept pace with rent increases, significantly compressing the disposable income of the younger generation. Li Jia-nong pointed out that when most of the income is used to pay rent, young people will find it difficult to save for a down payment, thus giving up the dream of homeownership [1].

Interplay of Supply-Demand Imbalance and Policy Impact

Despite the government's promotion of public housing and rental subsidy policies, the market's supply-demand imbalance issue remains unresolved. According to real estate agents' observations, although there are new construction projects in some areas, most are high-priced products that cannot meet the actual needs of renters. Coupled with the slow progress of urban redevelopment, the limited supply of housing in old urban areas further pushes up rent levels.

Additionally, the Ministry of Finance adjusted the residential rent standards in 2024, adding 1.2% to the declared land value and distinguishing between new and old systems based on the start time of house tax assessment, leading to an increase in rent standards in most counties and cities [2]. While this move may contribute to tax fairness, it could also serve as a basis for landlords to raise rent, further burdening renters.

References

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