Growth in mortgage and construction loans decelerated further last month amid the central bank’s interest rate increases and people’s gloomy outlook toward the economy, the Financial Supervisory Commission said on Wednesday.
New housing loans grew 8.08 percent annually to NT$9.19 trillion (US$285.87 billion) last month, the slowest increase in 22 months, while construction loans, an indicator of real-estate developers’ confidence in the sector, rose 10.68 percent annually to NT$3.38 trillion, the slowest rise in 36 months, the commission’s data showed.
The deceleration in new housing loan growth reflected the cooling sentiment among homebuyers affected by rate hikes, inflation and economic uncertainty, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) told an online news conference.
Photo: CNA
Real-estate developers became more conservative toward launching new housing projects, leading to lower construction loans, Lin said.
Government regulations cap banks’ mortgages and construction loans at 30 percent of their respective deposits and bank debentures, Lin said.
Any bank with a loan-to-deposit ratio higher than 28 percent would be monitored tightly by the commission, he said.
Last month, local banks’ new housing loans and construction loans rose by NT$80 billion from the previous month, while their deposits expanded by NT$300 billion, commission data showed.
Overall, local banks’ average property loan-to-deposit ratio last month fell for the third consecutive month by 0.01 percentage points month-on-month to 26.92 percent, the data showed.
Eight banks reported loan-to-deposit ratios exceeding 28 percent, but none had a ratio of more than 29 percent, the commission said.
Meanwhile, the ratio of nonperforming housing loans to mortgages was 0.07 percent last month, while the ratio of nonperforming construction loans to mortgages was 0.08 percent, the data showed.
As the capital markets are expected to remain turbulent this quarter and the central bank is likely to continue to increase rates, the local housing market might come under even more pressure, bank officials said, adding that the buying interest for existing homes has declined sharply, while that for pre-sale units has also cooled down.
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