Housing and construction loans continued to increase last month, but at a slower pace, as consumers became more conservative amid interest rate hikes and a gloomy economic outlook, the Financial Supervisory Commission said yesterday.
Housing loans grew 4.51 percent year-on-year to NT$9.45 trillion (US$304.54 billion) last month, the commission’s data showed.
It was the slowest annual growth in 23 months, compared with a 4.69 percent increase in April and a peak gain of 10.29 percent in June 2021, the data showed.
Photo: CNA
Construction loans, an indicator of real-estate developers’ confidence in the sector, grew 8.47 percent from a year earlier to NT$3.56 trillion last month, the commission said.
The growth rate was the lowest in the past 28 months and compared with a peak gain of 16.77 percent in January 2021, the data showed.
The commission attributed the softening momentum in housing and construction loans to the central bank’s selective credit control measures for local lenders, a series of rate hikes that began in March last year and increases in building material costs.
Although the central bank paused its rate hikes this month, its policy rates are still at the highest they have been since 2016, leading more consumers to be cautious about taking out housing loans, the commission said.
The average interest rate on mortgages approved by the largest banks in terms of housing loans edged up 21 basis points from a month earlier to 2.101 percent last month, increasing for the 18th consecutive month, central bank data showed.
Although the central bank’s selective credit control measures do not affect first-time home buyers, they affect corporates and property investors, as well as highly leveraged borrowers, the commission said.
Regulations cap a bank’s housing and construction loans at 30 percent of its deposits and bank debentures, the commission said, adding that it would monitor any banks whose ratio was higher than 28 percent.
Meanwhile, a National Central University survey conducted together with Taiwan Realty Co (台灣房屋) yesterday showed that the index for home buying this month dropped 0.1 points from a month earlier to 105.25.
However, the figure still indicated optimism regarding property buying opportunities over the next six months.
Additional reporting by CNA
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