Housing transactions in Taiwan’s six special municipalities last month shrank 8 percent from a month earlier as loan restrictions appeared to bear fruit in slowing the market, real-estate brokerages said on Monday.
Deals totaled 24,527 units in the six special municipalities of Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, brokerages said, citing data from local land administrations.
On an annual basis, transactions in the six regions rose 21 percent from a year earlier, the data showed.
Photo: Hsu Yi-ping, Taipei Times
Sinyi Realty Inc (信義房屋) attributed the month-on-month decline to a cash crunch as banks slow or shun mortgage applications to comply with a rule to keep home and construction loans at 30 percent of their deposits and debt issuance combined.
The self-imposed restrictions took effect after the central bank last month asked lenders to submit quantitative control measures by the end of this week detailing how they would limit mortgages without affecting urban renewal projects or first homes for self-occupancy.
As of June 30, real-estate lending — including for renovations — had approached 37.43 percent of total loans, the central bank said last week.
Deals in Taichung tumbled 16 percent monthly to 4,996 units, while in Taipei they fell 13 percent to 2,560 units, government data showed.
Transactions in New Taipei City and Taoyuan softened 4 percent and 5 percent to 5,747 units and 4,727 units respectively, while in Kaohsiung they slipped 8 percent to 3,987 units, the data showed.
Tainan bucked the trend with an 8 percent monthly increase to 2,510 units, the data showed.
Mortgage applications take several months, compared with one month previously, and some banks charge interest rates of 3 percent, compared with 1.775 percent for first homes.
Other banks are turning down new mortgage applications altogether to avoid riling the central bank, which might introduce new credit controls on Sept. 19 if loans grow unchecked.
The cash crunch has stirred unease among home buyers and prompted President William Lai (賴清德) to suggest in an interview that lenders should not overreact.
Lai’s campaign promise to help people buy their first home through interest subsidies and other favorable lending terms is widely believed to have revived a housing boom and propelled house loans.
Central bank Governor Yang Chin-long (楊金龍) on Monday met with bank presidents, telling them that eight state-run lenders have NT$800 billion (US$24.95 billion) on hand for mortgages.
The Financial Supervisory Commission yesterday said that real-estate lending stood at 26.47 percent of overall deposits, meaning there is room for more mortgages.
An uptick of 1 percentage point would release NT$558.5 billion based on the system’s total deposits of NT$55.85 trillion, the commission said, urging banks to expedite loan considerations for people seeking to buy their first home.
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