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.
HANDOVER POLICY: Approving the probe means that the new US administration of Donald Trump is likely to have the option to impose trade restrictions on China US President Joe Biden’s administration is set to initiate a trade investigation into Chinese semiconductors in the coming days as part of a push to reduce reliance on a technology that US officials believe poses national security risks. The probe could result in tariffs or other measures to restrict imports on older-model semiconductors and the products containing them, including medical devices, vehicles, smartphones and weaponry, people familiar with the matter said. The investigation examining so-called foundational chips could take months to conclude, meaning that any reaction to the findings would be left to the discretion of US president-elect Donald Trump’s incoming team. Biden
INVESTMENT: Jun Seki, chief strategy officer for Hon Hai’s EV arm, and his team are currently in talks in France with Renault, Nissan’s 36 percent shareholder Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify. Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday. However, one potential spanner in the works is
HON HAI LURKS: The ‘Nikkei’ reported that Foxconn’s interest in Nissan accelerated the Honda-merger effort out of fears it might be taken over by the Taiwanese firm Nissan Motor Co has become the latest buyout target in Japan as it explores a merger with Honda Motor Co and faces an overture from Hon Hai Precision Industry Co (鴻海精密), known as Foxconn Technology Group (富士康科技集團) internationally. Shares in Nissan yesterday jumped 24 percent, the most on record, to hit the daily limit, after the two Japanese automakers acknowledged that talks are ongoing to better position themselves for competitive challenges during a time of upheaval in the global auto industry. Foxconn — a Taipei-based manufacturer of iPhones, which has been investing heavily in factories to build electric vehicles — has also
CHIP SUBSIDY: The US funding would help alleviate the financial pressure from building two fabs in the US and should lift gross margins in 2026, the company said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it is to receive US$406 million in subsidies from the US Department of Commerce for two new US fabs under the CHIPS and Science Act, with the first batch of the funds likely coming next year. The grant represents 10 percent of the planned investments of US$4 billion in advanced semiconductor wafer manufacturing facilities in Texas and Missouri, GlobalWafers said. The commerce department is to disburse the funds based on the completion of project milestones over a multiyear timeframe, the company said. Along with the tax credit, which is equal to
RSS