The number of people applying for new mortgages in the first four months of this year fell about 20 percent from a year earlier, as interest rate hikes and credit controls dampened transactions and buying interest, analysts said yesterday, citing data from the Joint Credit Information Center (JCIC, 金融聯合徵信中心).
A total of 82,118 people obtained new mortgages from January to April, down 20.2 percent from the same period last year, and in line with a 21.3 percent drop in property transactions to 112,656 units in the first five months, Great Home Realty Co (大家房屋) head researcher Mandy Lang (郎美囡) said.
The credit control measures the central bank introduced seem to have cooled a property market fever that peaked in 2021, Lang said.
Photo: Hsu Yi-ping, Taipei Times
The central bank’s five interest rate hikes since March last year have pushed up borrowing costs above the 2 percent mark to a 14-year high, Lang said.
Meanwhile, the market is still assimilating the latest restrictions imposed on presale house purchasing agreements that took effect on July 1, she added.
Housing transactions reached 348,000 units in 2021, when 305,000 new property loans were issued, JCIC said, adding that both figures weakened 8.6 percent and 4.2 percent to 318,000 units and 292,000 people respectively last year.
The downtrend persisted in the first half of this year, with no signs of a recovery in sight, Lang said.
Ongoing economic weakness and widespread public discontent about housing affordability are not conducive in boosting the market’s performance or sentiment, she said.
Nonetheless, housing prices have remained resilient, as sellers have refused to concede and the pricing tug of war weighs on transactions, Lang said.
For the past one-and-a-half years there have been few cases of sellers making price concessions, such as when builders offered discounts for a batch of new houses to close a project, Lang said, adding that this did not apply to existing homes in popular locations.
The sticky situation explains why the government recently raised the cap on house taxes from 3.6 percent to 4.8 percent on multiple, unoccupied homes to pressure builders to off-load unsold houses, Lang said.
H&B Realty Co (住商不動產) agreed that the government has shown no intention of relenting until the property market responds as desired.
Potential home buyers should exercise caution on financial leverage to avoid becoming house poor, H&B research head Jessica Hsu (徐佳馨) said.
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