Taiwan’s housing boom lost momentum this month when major property brokers reported double-digit percentage declines in deals after the central bank asked lenders to slow mortgage operations to avoid an overconcentration of real-estate lending.
Evertrust Rehouse Co (永慶房屋) transactions shrank 23 percent from one month earlier as people took a summer vacation or shunned closing deals during Ghost Month, Evertrust deputy research head Chen Chin-ping (陳金萍) said.
The slowdown was due to an apparent cash crunch as banks decline or slow mortgage applications to prevent more money from flowing to real-estate properties, Chen said.
Photo: CNA
As of June 30, real-estate lending accounted for 37.4 percent of the banking system’s loans, close to the record of 37.9 percent, the central bank said last week, asking lenders to draw up quantitative control measures by Friday next week detailing how they would limit mortgages to help prevent an overconcentration of real-estate loans.
The central bank is likely to adopt more credit controls next month if voluntary tightening proves ineffective, Chen said.
Transactions dropped 8 percent compared with a year earlier as the low base effect also faded, Chen said.
The government in August last year introduced favorable lending terms, including interest subsidies and a five-year grace period, prompting an influx of first-home buyers.
Chinatrust Real Estate Co (中信房屋) sales this month tumbled 16.4 percent from last month, while flagging 2.5 percent from a year earlier, a Chinatrust broker said.
Chinatrust attributed the retreat mainly to the central bank’s quantitative controls, although the Ghost Month also dampened interest.
Fewer people displayed interest in house-hunting this month, as mortgage applications took longer and many sought help from the Financial Supervisory Commission, Chinatrust said.
Premier Cho Jung-tai (卓榮泰) said he is to meet with the central bank next week to make sure the quantitative controls measures would not affect first-home purchases.
Meanwhile, Taiwan Realty Co (台灣房屋) said its outlets observed a 20.2 percent slump in housing deals this month, or a 15.9 percent decrease from a year earlier.
Several lenders have voluntarily put a halt to new mortgage operations on concerns that their house loans might approach the statutory limit of 30 percent due to house price hikes.
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