Since the opening of the Hsuehshan Tunnel 10 years ago, property prices in Yilan have risen significantly, becoming unaffordable in particular for young people seeking to buy a home.
Furthermore, the expected population growth in the northeastern county as a result of the easier access allowed by the Hsuehshan Tunnel has not occurred.
The Hsuehshan Tunnel, part of the Peiyi Freeway (Taipei-Yilan Freeway), stretches 12.9-kilometers from Pinglin in New Taipei City to Toucheng in Yilan County.
Since the opening of the tunnel in June 2006, road travel between Taipei and Yilan has been reduced from two hours to just 40 minutes, which was seen as a boon to Yilan’s economic development.
At the time, the county government was encouraging people to migrate to Yilan, citing natural beauty, cultural richness and relatively low home prices as the county’s main attractions.
“Want to migrate? You don’t need to move to New Zealand. Try Yilan instead,” said one of the city government’s slogans.
However, the county government’s efforts seemed to have yielded little fruit, as Yilan’s population dropped to 458,117 in 2015 from around 460,000 in the years prior to the tunnel’s opening.
The decline in the county’s population growth may be due in part to better incentives and policies introduced by other local governments throughout Taiwan.
For example, restaurant owner Huang Yi-yuan (???), who had moved his household registration from Taipei to Yilan after the tunnel opened, later moved it back to Taipei because of a subsidy introduced by the Taipei City government in 2011 to help increase the city’s birthrate.
Under the program, a NT$20,000 subsidy (US$632) is offered to the parents of newborns if either one has had a registered household in Taipei for more than a year. Families with an annual net income of less than NT$1.13 million and children under five years old are eligible to a monthly subsidy of NT$2,500.
“Half a loaf is better than none,” Huang said, explaining his reasons for moving his household registration back to Taipei.
Although Yilan may not be a very attractive choice for people seeking to migrate, it remains a popular weekend tourist destination.
But even this has its drawbacks. On weekends, traffic on the road to Yilan slows to crawl and travel time from Taipei can take over two hours.
During such periods, the tunnel becomes congested, creating safety concerns, which for some commuters makes Yilan less than ideal as a residential area.
However, the completion of the Hsuehshan Tunnel has boosted tourism in Yilan and as a result has attracted hotel developers.
The famous hot springs resort area of Jiaoxi, for example, has become one of the top 10 tourist attractions in Taiwan since the opening of the Hsuehshan Tunnel and has drawn real estate developers interested in building hotels to meet strong demand.
The hot springs in Jiaoxi attract more than 2.5 million tourists per year and create over NT$3 billion annually in business opportunities, according to Liu Chih-hsiung (???), a marketing manager with Taiwan Realty.
Currently, luxury resorts in the Jiaoxi’s hot springs area are valued at NT$500,000 per ping (3.3 square meters), Liu said.
But the boom has spurred market speculation in Yilan and has squeezed out the average buyer, according to a local real estate agent.
“The biggest beneficiaries of the hot real estate market in the county are investors who speculate on the market, while property prices have become less affordable for middle-income households,” said Lu Po-kai (???).
For example, he said, the price of a three-story single-family house in non-prime areas of Yilan has risen from NT$7 million five years ago to nearly NT$10 million at present.
According to a report in My Housing magazine, the average price of an apartment in Yilan was NT$223,000 per ping as of the second quarter of 2015, a 12.6 percent year-on-year increase.
In 2015, Yilan collected NT$3.07 billion in land value increment tax, compared with NT$1.54 billion in 2006, the county government’s data shows.
Moreover, the value of land in Yilan, as assessed by the Ministry of the Interior as of late 2015, had risen 118 percent since 2013, compared with an average 30.54 percent increase in assessed land values across Taiwan.
Meanwhile, the housing market in the county has come to a near standstill as prices have soared beyond the reach of young buyers and the average worker, Lu said.
“The high housing prices have dashed many young people’s dreams of owning a home in Yilan,” he said.
Source: Focus Taiwan