Unaffordable Taiwan: An Economic Analysis of High Housing Prices and Low Wages

Abstract

This paper examines the issue of housing unaffordability in Taiwan, with the high rising housing price and stagnated salaries. The paper first analyzes the current situation of Taiwan’s housing market and salary, showing the issue that presents in the system. Moreover, by comparing to countries of similar economic condition, this paper further identifies this prolonged issue that is present in Taiwan’s housing market. Through the usage of housing index, median wage and housing price to income ratio from the Taiwanese government database, this paper further creates machine learning models to analyze the situation of the housing market and how severe the problem is. Finally, the paper uses a regression model to predict the housing price to income ratio in the future, showing the emergence of the issue, and how it requires government interventions to the housing market to resolve the issue.