Housing loans at top banks hit 14-month high

Staff writer, with CNA

Mon, Jun 25, 2012 - Page 13

Housing loans extended by the five major mortgage providers for last month hit a 14-month high on the back of higher property transactions during the period, the central bank said on Friday.

The housing loans extended by 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) totaled NT$55.39 billion (NT$1.85 billion) last month, up NT$3.83 billion from April, the central bank said.

During the month, the five banks extended NT$11 billion in housing loans under a government-sponsored subsidy program for young people, up NT$1.3 billion from a month earlier, the central bank said.

The central bank said the average mortgage rate at the five lenders last month rose 0.007 percentage points from a month earlier to 1.888 percent, reversing month-on-month declines in the previous two months.

The bank added that the hike in the average interest rate reflected the market situation after lenders conducted thorough evaluations.

According to property statistics compiled by the Taipei City Government, property transactions in Taipei totaled 3,922 units last month, up from 3,228 units a month earlier. However, last month’s figure fell 13.69 percent from a year earlier.

Property transactions in New Taipei City (新北市) hit 7,054 units last month, higher than the 6,043 units registered in April, while last month’s figure dropped 13.26 percent from a year ago, statistics compiled by the New Taipei City government showed.

The central bank said the higher property transactions were caused by an increase in first-time home buyers last month, while deferred purchases, caused by uncertainty over the market ahead of the January presidential election, also boosted property sales.

However, market analysts said the year-on-year decline in property transactions came after the implementation of a special sales tax, also known as the luxury tax, which aims to curb local property prices.

The luxury tax, which took effect in June last year, imposes a 15 percent sales tax on second homes sold within one year of purchase and a 10 percent sales tax on properties sold between one and two years after they were purchased.

Meanwhile, the central bank on Friday expanded its selective credit-control measures to luxury housing loans, as some banks’ loan-to-value ratios have been too high, while mortgage rates have been rather low.

The central bank now says that local bank lending for houses worth NT$80 million (US$2.67 million) or more in the Greater Taipei area and loans for houses valued at NT$50 million or more in other parts of the country should not exceed 60 percent of the value of those properties, with no grace period for debt repayment.