Interest rates for new mortgages in January climbed to a seven-year high of 1.953 percent at the nation’s five major state-run banks, while new house loans fell to a four-year low, as rising borrowing costs cooled the property market, the central bank said.
The monetary policymaker announced its observations after compiling mortgage loan data from the 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).
As private lenders usually take cues from the state-run banks when setting interest rates and risk premiums, their interest rates for mortgages could have already exceeded the 2 percent mark and might climb higher if the central bank raises interest rates again this month.
Photo: Hsu Yi-ping, Taipei Times
The five state-run lenders, which account for 40 percent of housing loans in Taiwan, charged higher borrowing costs following the central bank’s 0.125 percentage point rate hike in December last year, it said.
New house loans totaled NT$36.95 billion (US$1.21 billion) in January, the lowest since March 2019 and a 42.7 percent slump from December, the central bank said, attributing the drop to a weakening market and fewer working days.
The number of working days dropped to 16, compared with 22 days in December and 21 days a year earlier, due to the timing of the Lunar New Year holiday, it said.
The central bank declined to speculate on the trend last month, citing poor sentiment and continued holiday disruptions due to the 228 Memorial Day long weekend.
It is better to combine the data from January and last month to eliminate the holiday effect and gain a better understanding of market movements, it said.
Major property brokers have reported a decline in transactions last month, although buying interest rose slightly after the Lunar New Year holiday.
Housing transactions in the nation’s six special municipalities sank 47.5 percent year-on-year in January and plunged 38.4 percent from a month earlier.
The influence of interest rate hikes likely persisted last month, as some banks make adjustments on a quarterly basis, the central bank said.
State-run lenders are conservative about mortgage operations this year on concern that an upcoming ban on transfers of presale housing purchase agreements would restrain potential buyers and sellers.
Interest rates for new consumer loans in January gained 30.1 basis points to a 10-year high of 3.063 percent, after the seasonal effect of student loans faded, the central bank said.
Student loans have low borrowing costs and weigh on the interest rates of consumer loans in November and December, the central bank said.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
Taiwanese artificial intelligence (AI) server makers are expected to make major investments in Texas in May after US President Donald Trump’s first 100 days in office and amid his rising tariff threats, Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA, 台灣電子電機公會) chairman Richard Lee (李詩欽) said yesterday. The association led a delegation of seven AI server manufacturers to Washington, as well as the US states of California, Texas and New Mexico, to discuss land and tax issues, as Taiwanese firms speed up their production plans in the US with many of them seeing Texas as their top option for investment, Lee said. The
RSS