The central bank said its recent discussions about shortening mortgage periods would not affect first-time home buyers or urban renewal projects, but would be aimed at corporate buyers and multiple home owners, who are already subject to selective credit controls.
The central bank made the clarification in a statement on Saturday to calm fears that it would shorten mortgages from 30 years to 20 years during its June policy meeting in another bid to cool the housing market.
Central bank Governor Yang Chin-long (楊金龍) had told a meeting of the legislature’s Finance Committee on Thursday that there was still room for improvement regarding efforts to regulate real-estate financing, especially in areas with evident price hikes.
Photo: CNA
“House loans remain high, though stable,” Yang told lawmakers, adding that he was considering further selective credit controls, such as tightening mortgage terms and lowering loan-to-value ratios.
Property analysts said the proposed measures, if realized, would hit young first-home buyers the hardest, as their monthly mortgage payments could inflate significantly and many might default, wreaking havoc on the nation’s financial system.
People with 30-year mortgages of NT$10 million (US$335,412) would have to pay NT$49,413 per month, up from NT$35,724 at present, if they are switched to a 20-year mortgage scheme with an annual interest rate of 1.75 percent, senior property broker Lee Tung-rong (李同榮) said.
Shortening mortgage periods is a policy tool under consideration that would not apply to first-time home buyers, who have been excluded from its previous four macro-prudential measures, the central bank said.
Fresh selective credit controls, if deemed necessary at the board meeting on June 16, would only target corporate buyers, houses in hotspots and people who have third home mortgages, the central bank said.
Hotspots refer to the six special municipalities: Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, as well as Hsinchu City and Hsinchu County.
The central bank has banned grace periods for home purchases in those areas and is considering whether to cut their loan-to-value ratios, Yang said.
Lower loan-to-value ratios proved effective in cooling property fever years ago, he said, adding that stricter mortgages would also make home owners more cautious when planning their finances.
Several board members at the central bank’s March meeting said that housing price hikes bolster inflationary pressures, and the popular belief that owning real estate is the best defense against inflation suggests a need for policy intervention before it is too late.
SELL-OFF: Investors expect tariff-driven volatility as the local boarse reopens today, while analysts say government support and solid fundamentals would steady sentiment Local investors are bracing for a sharp market downturn today as the nation’s financial markets resume trading following a two-day closure for national holidays before the weekend, with sentiment rattled by US President Donald Trump’s sweeping tariff announcement. Trump’s unveiling of new “reciprocal tariffs” on Wednesday triggered a sell-off in global markets, with the FTSE Taiwan Index Futures — a benchmark for Taiwanese equities traded in Singapore — tumbling 9.2 percent over the past two sessions. Meanwhile, the American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, plunged 13.8 percent in
A wave of stop-loss selling and panic selling hit Taiwan's stock market at its opening today, with the weighted index plunging 2,086 points — a drop of more than 9.7 percent — marking the largest intraday point and percentage loss on record. The index bottomed out at 19,212.02, while futures were locked limit-down, with more than 1,000 stocks hitting their daily drop limit. Three heavyweight stocks — Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Hon Hai Precision Industry Co (Foxconn, 鴻海精密) and MediaTek (聯發科) — hit their limit-down prices as soon as the market opened, falling to NT$848 (US$25.54), NT$138.5 and NT$1,295 respectively. TSMC's
ASML Holding NV, the sole producer of the most advanced machines used in semiconductor manufacturing, said geopolitical tensions are harming innovation a day after US President Donald Trump levied massive tariffs that promise to disrupt trade flows across the entire world. “Our industry has been built basically on the ability of people to work together, to innovate together,” ASML chief executive officer Christophe Fouquet said in a recorded message at a Thursday industry event in the Netherlands. Export controls and increasing geopolitical tensions challenge that collaboration, he said, without specifically addressing the new US tariffs. Tech executives in the EU, which is
In a small town in Paraguay, a showdown is brewing between traditional producers of yerba mate, a bitter herbal tea popular across South America, and miners of a shinier treasure: gold. A rush for the precious metal is pitting mate growers and indigenous groups against the expanding operations of small-scale miners who, until recently, were their neighbors, not nemeses. “They [the miners] have destroyed everything... The canals, springs, swamps,” said Vidal Britez, president of the Yerba Mate Producers’ Association of the town of Paso Yobai, about 210km east of capital Asuncion. “You can see the pollution from the dead fish.