As new home mortgages granted by Taiwan’s five major state-run banks reached a five-month high, the average interest rate on new housing loans hit a record low, central bank data released on Tuesday showed.
Total new mortgages granted by Bank of Taiwan (臺灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行) increased 20.06 percent month-on-month and 31.56 percent year-on-year to NT$60.41 billion (US$2.01 billion) last month, the data showed.
Total new mortgages extended by the five banks for all of last year amounted to NT$592.55 billion, the highest since August in 2011.
The rise in mortgages reflected that December is usually the peak month for the domestic housing market.
It was also in line with the latest housing transaction data released by the six major municipalities, which show that transactions rose 13.3 percent month-on-month and 24.4 percent year-on-year in the six cities to 22,316 units last month, with Taichung posting the highest monthly growth of 30.8 percent and Taoyuan reporting the biggest annual increase of 50 percent, according to local governments’ tallies.
The total number of housing transactions in the six major municipalities increased 9.4 percent to 232,031 units last year from a year ago.
Despite rising mortgage demand, the five banks’ average mortgage rate fell to 1.608 percent per year last month, which was down from the previous month’s 1.617 percent and the lowest on record, the central bank data showed.
The central bank attributed the situation to lenders competing with each other to offer preferential rates for quality clients, the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) reported on Wednesday.
Some local lenders were reportedly offering mortgage rates as low as 1.56 percent annually for military personnel, civil servants and public school teachers, while rates for others were around 1.6 percent, the newspaper said, citing central bank officials.
Demand for mortgages was fueled by the current housing market being mostly focused on owner-occupied or self-use homes while the general performance of the housing market last year was stable, the Liberty Times reported, citing central bank officials.
Separately, the five state-run banks last month saw their average lending rates fall to 1.398 percent, down 0.017 percentage points from 1.415 percent in November, which the central bank attributed to a decline of 0.184 percentage points in the interest rate associated with capital expenditure loans to 1.633 percent.
Thanks to the need for funds by returning Taiwanese companies, capital expenditure loans totaled NT$800.05 billion last year, the highest on record, while the average capital expenditure lending rate was 1.81 percent, the lowest since 2011, central bank data showed.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
BRAVE NEW WORLD: Nvidia believes that AI would fuel a new industrial revolution and would ‘do whatever we can’ to guide US AI policy, CEO Jensen Huang said Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) on Tuesday said he is ready to meet US president-elect Donald Trump and offer his help to the incoming administration. “I’d be delighted to go see him and congratulate him, and do whatever we can to make this administration succeed,” Huang said in an interview with Bloomberg Television, adding that he has not been invited to visit Trump’s home base at Mar-a-Lago in Florida yet. As head of the world’s most valuable chipmaker, Huang has an opportunity to help steer the administration’s artificial intelligence (AI) policy at a moment of rapid change.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS