Mortgages approved by local banks grew 0.23 percent month-on-month to NT$9.33 trillion (US$306.4 billion) in February after contracting 0.12 percent in January, which was the first decline in a decade, data compiled by the Financial Supervisory Commission showed last week.
On an annual basis, mortgages grew 5.49 percent, the lowest increase in 44 months, the data showed.
The sluggish growth came as inflation, rate hikes and macroeconomic uncertainty continued to drag the housing market, the commission said.
Photo: Clare Cheng, Taipei Times
“People’s interest in real estate appears to have recovered mildly after the Lunar New Year holiday, but overall, the market is cooling down,” Banking Bureau Chief Secretary Phil Tong (童政彰) said on Thursday last week.
It remains to be seen whether the expansion in mortgages continued last month, when the central bank raised its policy rates by 0.125 percentage points, the commission said.
Rate hikes have dented demand for homes due to higher costs, while developers have become more cautious about launching new projects due to rising building material costs amid inflation, Tong said.
The latest data also showed that approved construction loans increased 0.56 percent monthly and 9.34 percent annually to NT$3.5 trillion in February.
The annual gain in construction loans was the lowest in 44 months, indicating a weakening sentiment among developers, the commission said.
The average property loan-to-deposit ratio of local banks fell to 26.28 percent in February, the lowest in 44 months, commission data showed.
Regulations limit a bank’s mortgage and construction loans at 30 percent of its deposits and bank debentures.
Banks whose property-to-loan ratio exceeds 28 percent are advised by regulators to reduce lending activity.
No bank had a ratio above 28 percent in February, the commission said.
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