Investigating the use of second houses for middle- and advanced-aged people: empirical evidence from a metropolitan city

Housing ownership quantity correlates with individual wealth, especially in the context of the high housing prices of the metropolitan city of Taipei, Taiwan. The multiple properties owned by middle- and advanced-aged (MAA) people are worth particular attention. However, the availability of information regarding their property ownership rates and use behaviors of multiple properties is limited. This study applied a rigorous quasi-experimental approach to link stated preference methods and Multinomial Logit model to disclose the use behaviors of MAA people regarding their second house. The findings of this study show that the mortgage-to-income ratio and rental income significantly affected MAA people’s preferred uses of second houses. However, they upheld the existing preferred uses of their second house despite simulating mortgage payments or rental revenue increases. The market share for the idle second houses held by the MAA people also shows little significant change. This result implies that housing resources are wasted and MAA people are conservative in their financial management. The findings highlight the necessity of introducing a speculation and vacancy tax and a property hoarding tax to encourage them to rent out their second houses.