Housing affordability worsens in Taiwan as mortgage burden and price-to-income ratios rise

Housing affordability in Taiwan has become more burdensome, with both the mortgage burden ratio and the house price-to-income ratio increasing in the first quarter of 2026. The national mortgage burden ratio rose to approximately 41.46%, an increase of 0.71 percentage points from the previous quarter. Concurrently, the national house price-to-income ratio climbed to 9.47 times, up 0.15 times from the prior quarter.

This marks a significant shift, as both indicators had shown improvement for four consecutive quarters since the first quarter of 2025. Real estate industry professionals attribute the renewed pressure to a combination of factors. Huang Shu-wei, director at Colliers International Taiwan, explained that housing affordability is determined by housing prices, income, and interest rates. While income changes slowly and housing prices fluctuate, interest rates are the most unpredictable. Taiwan's five major banks saw new mortgage interest rates reach 2.3%, the highest since the 2008 financial crisis.

Experts predict that mortgage rates may continue to rise due to ongoing AI investment booms and inflationary pressures, which are driving capital towards higher-yield financial products. Coupled with continued housing price increases, and considering that income is based on median household purchasing power, the benefits of stock market wealth effects are limited for most. This exacerbates the high housing cost burden for average salaried families.

Tseng Ching-te, project manager at Xinyi Realty's Real Estate Research Office, noted that the persistently high mortgage burden is due to housing prices remaining at relatively high levels. Additionally, the central bank's interest rate hikes and the seventh wave of mortgage rate increases have raised monthly mortgage payments. Consequently, despite a slight year-on-year decrease in the housing price index in the first quarter, the burden remains high.

He Shih-chang, CEO of Xinyi Realty's Real Estate Research Office, cited United Nations data showing Taiwan's house price-to-income ratio at approximately 9.47 times, compared to a global average of 11.2 times among 181 countries. While this suggests Taiwan is doing better than some, the reality for homebuyers is a more intense struggle. In an environment of limited salary growth and persistently high housing prices, the perceived hardship far outweighs the statistical figures.