Mon, Oct 29, 2012 - Page 13 News List

Construction loans reflect sector’s attitude

WARY:The outstanding balance of housing loans implies that the central bank’s move to tighten credit control measures may have produced a cooling effect

By Amy Su  /  Staff reporter

Construction loans for last month showed the first month-on-month drop since July last year, reflecting the construction sector’s conservative attitude toward the market under the price registration policy launched on Aug. 1, according to statistics compiled by the central bank.

The outstanding balance of construction loans totaled NT$1.4536 trillion (US$48.62 billion) at the end of last month, down NT$100 million from the end of August, ending the rising trend in the previous 14 straight months, the central bank said on Friday.

On an annual basis, the outstanding balance of construction loans rose 8.81 percent last month, down from 9.9 percent growth recorded at the end of August, marking the second month of decline in a row, providing more evidence for the downward trend, the bank’s data showed.

The trend indicated that construction firms maintained a conservative outlook for the housing market, which reduced their willingness to launch construction projects.

It also provided further evidence that the central bank’s move to tighten credit control measures, as well as the government’s newly launched policy of real price registration, may have produced a cooling effect on speculative transactions on the housing market.

The outstanding balance of housing loans also implied a similar trend, with its month-on-month growth level contracting continuously.

The outstanding balance of housing loans reached NT$6.826 trillion at the end of last month, rising 0.08 percent from the end of August, the third consecutive month the growth level has slowed, central bank statistics showed.

Compared with the same period last year, the outstanding balance of housing loans increased 0.91 percent last month, also down from 0.94 percent year-on-year growth posted in August, data showed.

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