Mortgage loans extended to property investors for second homes have decreased nearly 40 percent in the past few weeks, although outstanding loans for home purchases and construction reached a new high last month, the latest central bank data showed.
The monetary regulator said that the total amount of loans to second-home buyers, now classified as real estate investors, dropped to NT$4.4 billion (US$136.8 million) between May 10 and last Sunday, from NT$7.3 billion in the previous two weeks.
Yu Chin-tang (尤錦堂), the central bank's treasury bureau chief, said on Thursday that the recent decrease in home loans to property investors indicated that the bank's measures to curb property 〝speculation have been effective.
Last month, the central bank launched a financial examination of local banks, requesting that they submit reports on their loan packages for property investors, including the amount of loans, the loan-to-value ratio (LTV) and loan interest rates, in a bid to rein in skyrocketing housing prices.
The central bank said that the average LTV ratio fell to 65 〝percent in the past two weeks from 70 percent between April 26 and May 9, with the interest rate on home loans increasing to 2.02 percent from 1.94 percent.
Home loan interest rates should reflect the cost and risk of capital, and the central bank will keep an eye on local mortgage lenders to see if they offer unreasonably low interest rates to borrowers, Yu said.
Outstanding home loans reached a record high of NT$4.97 trillion last month, up NT$24 billion from March, while construction loans amounted to NT$1.095 trillion, up NT$16 billion from a month earlier, the central bank statistics showed.
The central bank said the substantial growth in housing and construction loans last month reflected that homebuyers wanted to apply for loans before credit-tightening measures were implemented.
Yu said that both state-run and private banks would step up efforts to enhance risk management on home loan lending, adding that the central bank would increase pressure on local lenders to tighten credit.