New home mortgages from five major state-run banks last month reached the highest level for March, while the average interest rate on new housing loans hit a record low, central bank data released on Thursday 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 15.83 percent month-on-month and 15.5 percent year-on-year to NT$53.69 billion (US$1.78 billion) last month, the data showed.
For the first quarter, total new mortgages extended by the banks amounted to NT$138.3 billion, down 16.6 percent from the previous quarter, but up 5.95 percent from a year earlier, the data showed.
The increase in mortgages issued last month reflected recovering demand in the domestic housing market after the Lunar New Year holiday.
It was also in line with the latest housing transaction data released by the six special municipalities, which show that transactions rose 9.9 percent month-on-month and 7.8 percent year-on-year to 19,824 units last month, with Taoyuan posting the highest monthly growth of 20.7 percent and the biggest annual increase of 36.6 percent, Evertrust Rehouse Co (永慶房屋) said, citing local government figures.
The increase was also buoyed by demand for home purchases and the completion of new construction projects in some areas, the Chinese-language Economic Daily News reported last week, citing central bank Economic Research Department Deputy Director Wu Yih-Jiuan (吳懿娟).
In the first quarter, the total number of housing transactions in the six special municipalities increased 6.8 percent to 53,364 units from a year earlier, Evertrust said earlier this month.
Although the COVID-19 outbreak did not significantly affect the housing market in the first quarter, the pandemic might start to affect transactions from this month, Wu said.
Despite rising mortgage demand, the five banks’ average mortgage rate last month fell to 1.593 percent per year, which was down from the previous month’s 1.611 percent and the lowest on record, the central bank data showed.
The central bank attributed the rate decrease to lenders competing to offer preferential rates for quality customers. The central bank on March 19 cut its key interest rate by 0.25 percentage points, which also helped push mortgage rates last month to below 1.6 percent, it said.
Separately, average lending rates at the five banks last month fell to 1.291 percent, down 0.143 percentage points from the previous month, due to falling interest rates of various loans, the central bank said.
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