[Question] RE: Are people who take out loans to buy a house now not afraid of a sharp drop in house prices? -

This article is a reply to the PTT article

[Question] Are people who take out loans to buy a house now not afraid of a sharp drop in house prices? - Kanban Gossiping - Batch Kicking Industry Square (ptt.cc)

I can't help but feel a little concerned about some people who seem to be very optimistic seeing the tweets

It's not that I think house prices will definitely rise or fall in the future, but blind optimism may not be a good thing

In the past, housing prices did not go up and down as some people thought.

Taiwan's real estate market has also experienced a bear market, but it has been forgotten by many people

A few days ago, I was looking for some early information, and I happened to see a list of articles written by a professor in real estate.

Zhang Jin-e, Professor of the Department of Land Administration (realestate.com.tw)

One of the articles was written on August 19, 1989. Don't earn interest, lose house price, or even earn house price and lose house. It was published in the United Daily News.

The author criticizes the government's housing market rescue policy in the article (because the market needs to be rescued after it has fallen for a while)

, and admitted that the Chinese people have long had the myth of the three real estate myths

1. Real estate only goes up and not down
2. Real estate developers cannot fail, otherwise it will cause an economic crisis
3. The construction industry is the economic locomotive. From today's perspective, perhaps these three myths still exist in many people's minds

But the author also hoped that the government would not intervene excessively in the real estate market, so as to make the market healthy and normalized

Another article titled Real Estate Recession and Financial Crisis Posted on November 21, 1989 mentioned that real estate has fallen into a cold winter since 1995, with a drop of as much as 50%

And the government's preferential loan policy seems to be ineffective, so the author makes some editorial criticism.

Both articles mentioned that the main reason for the poor housing market in Taiwan at that time was the uneven quality of builders

For details, you can click on the professor's blog to see

From many documents at that time, it can be seen that the housing market is not only up and down. In response to the situation of the banks at that time, many banks had bad credit, so after the default, they seized a large amount of real estate collateral, but they could not sell in the bear market.

The worst of them is ZTE Bank, which held a lot of non-performing assets and was emptied of the depositors' money. In the end, it triggered a run and had to close down.

Later, the so-called secondary financial reform was also derived to eliminate bad debts.

This situation continued to decline when SARS occurred. Then a few years later the financial tsunami was when house prices hit their lowest point

Then there was the real estate bull market in the next ten years.

This bear market has been falling for more than ten years. Those who are stuck may just not be like stocks, and there are quotes to see every day

It's uncomfortable enough, anyway, I don't know how much it will fall if I don't sell it.

From the perspective of asset allocation, it is recommended to diversify assets

If you just want to buy a house for the first time, buy it if you need it.

But investors may be a little tighter