This paper leverages Taiwan Semiconductor Manufacturing Company (TSMC)’s fab construction announcements in three cities in Taiwan as a quasi-experiment, providing causal evidence for the impact of expectation shocks on housing market dynamics. Our findings indicate that expectation shocks significantly increase housing prices while rents remain stable, resulting in a decoupling between the two. Addition- ally, housing prices are sensitive to both good and bad news regarding forthcoming fabs. Lastly, expectation shocks do not have a substantial impact on transaction volumes or housing supply.