Among my small team I have a man fluent in Mandarin. Some on the team joke Ciaran Madden was a spy when he lived in Taiwan. Because since returning to his native Ireland he always drives under the speed limit. Keeps under the radar literally. And what he did for 12 years in Taiwan is something of a mystery…
We know he worked in Taiwan’s Cabinet building…he attended diplomatic soirees…he wrote for a newspaper for a while…
And he certainly got to know the island.
Earlier this month, he returned to the island, part vacation, part catching up with friends and his wife’s family. But you don’t just switch off an instinct for real estate scouting…
While in Taiwan, Ciaran also took some time to investigate the real estate scene around the capital, Taipei.
He sent this report…
Ronan McMahon, Founder, Overseas Dream Home & Real Estate Trend Alert
P.S. Have you been to Taiwan or a neighboring country in Asia? Have a place you’d like us to scout there? I’d love to hear your thoughts. Share them here.
Scouting the Most Dangerous Place on Earth
By Ciaran Madden
“The most dangerous place on Earth.”
That’s how The Economist magazine famously described Taiwan on its cover some years back.
The irony is, when you’re on the ground here, it’s hard to imagine anywhere safer…
The danger, of course, comes from China.
To the communist leaders in Beijing, Taiwan is a renegade province that must be reunited with the mainland, by force if necessary.
The Taiwanese, though, have been separated from the mainland for 75 years. They’ve grown partial to their freedom and democracy and have little desire for unification with China. And given that the U.S. considers Taiwan a key ally and supplies it with arms for self-defense, this makes the island a major potential flashpoint. If World War III were to start anywhere, it could well be here.
This explains The Economist’s headline, and why the China question dominates virtually every discussion about Taiwan.
But let’s park this China issue for the moment and just talk about what it’s actually like in Taiwan.
Because there’s a lot to love about this stunningly beautiful tropical island…
Taiwan is in East Asia, southeast of China, west of Japan and north of the Philippines.
The beating heart of Taiwan is its bustling capital, Taipei.
This vibrant, frenetic metropolis is an intoxicating mix of ultra-modern skyscrapers and centuries-old temples, luxury shopping malls and bustling night markets…all set against a background of lush, soaring mountains that sit to the north and east of the city. Connecting it all you have an ultra-modern, pristine subway system.
This is a wealthy place.
Taiwan is one of the world’s richest nations (the 14th richest in terms of the purchasing power of its population, according to one respected survey), with a booming tech-focused economy and a big middle class. You’ll see supercars and high-end hotels, luxury boutiques and sprawling mega-malls.
And as I say, Taipei is a ridiculously safe place. Petty crime is incredibly rare. Virtually no areas of the city are off-limits. The young and old alike walk the streets at all hours.
If like me you’re a foodie and an adventurous eater, this is a special place.
Taiwan was a Japanese colony for 50 years before 2 million soldiers and their families fled here from China at the end of the Chinese civil war, bringing with them their food cultures from right across the country. More recent waves of immigration have brought people from Thailand, Vietnam, Indonesia, Korea, the Philippines, and the West…
The upshoot is that there’s food here for every palate and every budget.
For a buck or two, you can snack on night market street food favorites like pork belly bao buns, oyster omelets, or barbecued octopus tentacles (they’re more delicious than they sound, just don’t look at the suckers).
Or you can spend hundreds of dollars per person at one of the 34 Michelin-starred restaurants in town. (A personal favorite is Mume, one of Asia’s 50 best restaurants serving a contemporary take on traditional Taiwanese fare.)
Real Estate in Taipei: A Long-Term Uptrend
Taipei is not always beautiful. The city is a jumbled patchwork, in that particular way you find in the rapidly developed cities of East and Southeast Asia.
From the 1940s to the 1990s, Taiwan went from one of the world’s poorest countries to one of the richest in what’s economists call the “Taiwan Miracle.”
Today, Taiwan dominates global computer chip manufacturing. Around 90% of the world’s most advanced chips are built here. In that way, Taiwan plays an essential role in the global economy and in all our lives, since these chips are in virtually every piece of technology we use, from cars to phones to medical devices.
Taiwan’s rapid progress from impoverished nation to major industrial power is evident in the tapestry of Taipei.
You can almost tell the age of the residential and commercial buildings in Taipei by looking at their height. Certain streets are comprised of unattractive gray blocks of between four and six stories. These mostly date to the 1970s and ’80s or earlier, as industrialization was beginning to take hold.
In the late ’90s and 2000s, taller, more aesthetically pleasing buildings began to emerge, as the country grew ever wealthier. Residential buildings in this period started regularly hitting the double-digits in terms of floors, while skyscrapers began flying up.
The preeminent symbol of this is Taipei 101, the superstructure named for its number of floors that from 2004 to 2010 was the tallest building on the planet.
Today, the newest residential projects tend to be 15 to 20 stories or more. And projects of this size and scope are increasingly spreading to the suburbs, shooting up at a riotous speed.
As you so often find in Asia, the pace of development here is mesmerizing…
So what does it cost to own in Taipei?
Well, people here are prosperous and they love investing in real estate. (Taiwan ranks first in Asia and fifth globally in terms of net financial assets per capita.) Real estate prices have been on a seeming unending tear here, with prices rising continuously for decades.
Interest rates have also long been persistently low (they’re about 2.2% on a 30-year mortgage as I write). So, money continues to flood into real estate and prices are high.
To own in the prestigious Xinyi District where Taipei 101 is located, expect to pay $500,000 for an older, basic studio of just 500 square feet. Something like this one.
For something larger and newer, say a preconstruction condo like this of just over 1,000 square feet, you’ll need around $850,000.
Even in the suburbs, to own in one of the new large-scale buildings, you’ll need at least $500,000 to $600,000. And that’s for something with a single bedroom. Prices go up steeply from there. Large apartments of more than 3,000 square feet, such as these in a new building just outside Taipei, sell for millions of dollars.
There are more affordable options too. In the older gray-block buildings, you’ll find options from around $175,000, though these almost always need significant refurbishment.
Taiwan is not a place for cheap real estate then, at least not in the major cities…
That’s why it can pay to look outside them.
Waiao: A Beach Town with Potential
One of the great joys of living in Taipei is its proximity to nature. Taiwan is a small island, around the size of Maryland. You’re never far from a mountain or a beach.
I’d planned to travel down the east coast, the Pacific Ocean-facing side of the island, to see some of my favorites. Many of the most picturesque beaches are in the southern, more tropical half of the island. But just before I arrived a typhoon struck, so train connections were disrupted. (This is part and parcel of life here on the Pacific rim.) Instead, I visited a favorite in the north.
Northern Taiwan doesn’t have the kind of postcard-perfect beaches you find in Thailand or Indonesia. This coastline is mostly rocky cliffs, a result of it being constantly battered by the vast open ocean. But when you do get beaches, they’re have lots of charm, with tropical hills that run down to the water. And they tend to be quiet and undeveloped, giving them an unexplored feel.
A good example of this is Waiao, a small beach town in northeastern Taiwan about 45 minutes’ drive from Taipei.
Historically, Taiwan hasn’t had a big beach culture. By cultural tradition, pale skin is favored to darker, more tanned skin…something that holds true across Japan, Korea and China. So, people traditionally avoided sunbathing.
Now, that’s changing though. Young Taiwanese are visiting the beach more often as more Western values take hold. Beaches like Waiao are often jammed at weekends now. Since I was last in Waiao, a new high-end resort has been built overlooking the beach. Prices start at $300 per night mid-week…pricey for Taiwan.
Still, there’s virtually no housing stock near beach towns like these. There was simply no demand in the past. (Though you can pick up an apartment in one of the nearby towns from $200,000 to $300,000.)
I suspect that the lack of beachfront real estate is something that will change in Taiwan. It feels like the demand is there. And indeed, I saw evidence of new housing developments under construction in more isolated locations overlooking the coast, something that would have felt unlikely a decade or two ago.
That’s a snapshot of northern Taiwan today—stunning Pacific beach towns with growth potential, and a soaring metropolis that combines the safety and world-class infrastructure of a place like Tokyo with the frenetic energy and vibrant food culture of a Southeast Asian city like Kuala Lumpur or Bangkok.
It all sounds very appealing and it is when you’re on the ground. But that brings us back to the China question.
The Economist’s “most dangerous place” headline was a tad alarmist, but there’s no question the geostrategic risks here are a massive concern.
So, I’d be in no rush to own real estate here. But as a place to visit for a few weeks or a few months, Taiwan has a lot to offer.
Ronan says: Fascinating…I didn’t know Taiwan was a Japanese colony until relatively recently. The food scene sounds amazing. And those super low interest rates I’m sure have played an integral role in driving real estate prices higher, and then higher. Those have typically been negative real interest rates for some time. That means the cost of borrowing is lower than the rate at which money’s purchasing power is eroded through inflation, making a long-term fixed mortgage, even on overpriced real estate, a compelling opportunity and inflation hedge.
I’m guessing cultural factors are driving demand, too. In Chinese cultures, people just love to park capital in real estate. Of course all this comes on top of the scarcity created by the population density and geography. And those beach photos are just not what I pictured or expected of Taiwan.
Sadly, I wouldn’t want to bet on Taiwan. It’s a miracle…but the Chinese question looms large and also the question of what happens if/when it loses global dominance of the advanced chips market. I like places that do well in times good and bad. Things could go very bad for Taiwan. There’s sadly a lot of downside. But this is all a big reminder to me of what happens when cheap money drops on an advancing economy…think Poland or the former East Germany post the collapse of the Berlin Wall…
Real estate values rise because of increasing wealth and demographics, then the cheap money is the fuel to the flame. Explosive!
I can’t wait to travel more in Asia again. Next year I’m planning a trip to Japan and to beach destinations in Southeast Asia. You’ll be hearing about that scouting here, and if you have any destinations you’d like me to scout, let me know here.
Your Daily Dream Home
Fivizzano, Tuscany, Italy
This charming three-bedroom stone house sits in a hilltop location with views of the Alps and surrounding fruit orchards and olive groves. The property features a large terrace and retains original stone arches and tiled floors.
The main house includes a kitchen/living room, studio, large double bedroom, and bathroom. An attached building in the courtyard offers potential for an additional bedroom. A large ‘cantina’ storeroom lies below.
The house is located just 2.5 miles from amenities and 3 miles from Fivizzano, a medieval town known for its cultural events. The area provides easy access to beaches, hiking trails, and is within an hour’s drive of Pisa, Parma, and Genova airports.
Tuscany is renowned for its rolling hills, vineyards, olive groves, rich artistic legacy, and cultural heritage. Historic cities like Florence and Siena make it a prime destination for art enthusiasts, food and wine lovers, and those seeking the quintessential Italian countryside experience.
