The average interest rate on new housing loans extended by Taiwan’s five major mortgage providers unexpectedly rose to 1.626 percent last month, after declining for four consecutive months, data released by the central bank on Friday showed.
Average mortgage rates at Bank of Taiwan (台灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行) increased 0.006 percentage points from 1.620 percent in July, the data showed.
The central bank said the rise in the average interest rates on new housing loans was due mainly to a decrease in preferential mortgages for first-time home buyers — which usually come with lower interest rates, the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) reported.
The five banks’ data are used to gauge the overall health of the property market, as their combined loans account for about 40 percent of all local mortgages extended.
Last month, total new mortgages extended by the five state-run banks dropped 10.45 percent month-on-month and 13.42 percent year-on-year to NT$36.85 billion (US$1.2 billion), the lowest in four months, central bank data showed.
However, mortgages taken out by first-time home buyers saw an even larger decline, down NT$1.45 billion, or 20.14 percent, from July to NT$5.75 billion, the Liberty Times reported, citing central bank data.
Preferential mortgages for first-time home buyers as a percentage of total housing loans extended dropped from 17.5 percent in July to 15.6 percent last month, it said.
Market watchers attributed the decline in housing loans to the nine-in-one municipal elections on Nov. 24, the traditional Ghost Month low season last month and torrential rain later in the month, which discouraged buyers.
In the first eight months of the year, the five state banks’ new housing loans totaled NT$319.23 billion, up 11.24 percent from NT$286.983 billion a year earlier, central bank data showed.
The banks saw their average interest rates on loans fall to 1.449 percent last month, down 0.008 percentage points from 1.457 percent in July, which the central bank attributed to lower costs associated with corporate loans for working capital and capital expenditure.
Excluding government loans, interest rates averaged 1.466 percent, down 0.023 percentage points from 1.489 percent in July, the central bank said in a statement.
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