Government-Backed Mortgages for Young People Sends House Prices Up

A policy meant to help young people afford homes is being abused, and has inadvertently sent prices up.

Transcript

00:00It was supposed to get young people on the property ladder in an unforgiving housing

00:04market.

00:05A government program offers young buyers preferential interest rates and a longer period to pay

00:09off mortgages.

00:11But a finance ministry probe found more than 1,500 people breaking the rules between the

00:15start of last August and the end of March.

00:18And all this rule-breaking has instead helped drive prices up even higher.

00:23Most of these cases involve buyers secretly renting out their new properties.

00:27Some were caught when tenants asked the government for rent subsidies.

00:31Officials say these illegal landlords will have their preferential conditions revoked.

00:45But that's not the only trick investigators have uncovered.

00:48Over a hundred properties bought in a young person's name turned out to be owned by someone

00:52else, an investor looking for a good deal.

00:55The finance ministry says it will launch another probe to catch more people abusing

00:59the system.

01:00But housing justice advocates say the probe only looked at a tiny number of the tens of

01:04thousands of homes bought under the scheme.

01:06And they're skeptical the policy could be effective even if rule-breakers are caught.

01:25Other policies may be needed to truly bring housing within the reach of ordinary young

01:37people.

01:49Taiwan has some of the world's most unaffordable housing in terms of both prices and average

01:53incomes.

01:54This is especially true in the big cities like Taipei.

01:58And activists to Market Watchers agree that there are other steps that can and should

02:02be taken to give young people a piece of the housing market.

02:06Joseph Wu and John Van Triest for Taiwan Plus.