The central bank yesterday allayed any suggestion of a bubble in the nation’s housing market, citing the year-on-year decrease in the number of building ownership transfers over the past few months.
While the nation’s housing and construction loans hit record levels last month, the bank said the domestic housing market remained under control.
The bank’s remarks came after real-estate finance data released on Monday showed that housing loans totaled NT$5.751 trillion (US$191.67 billion) last month and construction loans reached NT$1.567 trillion.
The bank attributed last month’s rising housing loans to the completion of several new housing projects, while a planned change in floor area control measures also prompted land developers to accelerate project development before July next year.
However, combining these two figures, overall real estate-linked financing accounted for 50.3 percent of the nation’s GDP last month, which is usually a cause for concern as major economies generally view a ratio above 40 percent a potential bubble in the making and detrimental to the overall economy.
However, the bank downplayed such concerns, saying that the 50.3 percent figure remained lower than the similar figures for the UK and Singapore.
The bank said it expects the nation’s volume of housing transactions to drop further in the coming months, considering the number of registrations of building ownership transfers showed a double-digit percentage decrease year-on-year from March to May.
The transaction volume in the nation’s six major urban areas also declined annually from March to last month, the bank added.
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