The news that Cabinet is expected to approve a plan to subsidize a further NT$200 billion (US$5.7 billion) of home loans through banks sent construction and property shares soaring yesterday.
The plan -- approved by the Cabinet later yesterday -- is designed to boost the nation's sagging property prices. The subsidy lets banks cut the interest rate to 0.425 percent from 0.85 percent of the total rate, the central bank said in press release yesterday.
A NT$200 billion pool of subsidized loans created in August will be exhausted in May, a Chinese-language newspaper said yesterday.
The new funds will be available through April 13, 2003, the statement said.
Taiwan's property market is struggling to absorb more than a million excess homes built during a real estate boom of the 1980s and 1990s, when property prices rose with stock prices.
"The subsidized-loan program will allow more people to fulfill their dream of buying a house," the statement said.
Taiwan's central bank cut rates 12 times between December 2000 and December 2001 to stem a recession, lowering the key rediscount rate charged to commercial lenders to a record-low 2.125 percent. Taiwan construction and property shares rose as much as 3.9 percent as a group yesterday.
Cathay Real Estate Development Co (國泰建設) rose NT$0.3, or 3.5 percent, to close at NT$8.95 a share.
Meanwhile, Hua Nan Financial Holdings Co (
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