Although the Financial Supervisory Commission (FSC) may propose putting a stop to the government's preferential housing loans scheme, the nation's property market is unlikely to be greatly affected against the current benign backdrop of low interest rates and abundant fund flows, a leading figure in the real estate development industry said yesterday.
"It is time for the preferential loan project to retire now ? after it successfully boosted the nation's property market," Lai Cheng-i (
Even without the incentive scheme, the market can be sustained by the low mortgage rates because of an excessive supply of funds for the next three to five years, Lai said.
The FSC is considering whether to suggest that the government stop offering the scheme as part of the financial watchdog's plan to tighten the nation's lending for housing as a precautionary risk control, the Chinese-language Commercial Times reported yesterday.
The commission said that the amount of housing loans to both home buyers and developers has accumulated to 25 percent of the total amount of banks' deposits and bank debentures, approaching the regulatory ceiling of 30 percent.
The financial regulator said that it hoped that banks would keep prudent risk management in mind while lending to home buyers.
nothing certain
An Executive Yuan spokesman told the Taipei Times yesterday that the proposal is not a concrete policy yet.
"The issue needs to be discussed by the inter-department financial and economic panel that is led by Vice Premier Tsai Ing-wen (蔡英文) and meets weekly," Cabinet Spokesman Cheng Wen-tsang (鄭文燦) said in a telephone interview.
Cheng did not give a time frame for when a decision would be made.
The government started to subsidize home buyers in 1998 by providing loans charging lower interest rates through selective lenders in a bid to stimulate the nation's lackluster real estate sector.
The authority then extended the offer several times, bringing the total balance of the preferential loans to NT$1.8 trillion (US$55 billion).
However, the latest batch of government housing loans -- worth NT$300 billion in May last year -- appeared much less attractive to home buyers because they had an interest rate of 3.04 percent, compared with other housing mortgage schemes in the market that offered rates as low as 1.98 percent, according to Shining Group's data.
Up to NT$13 billion of the government loans remain unused so far, the data showed.
The turnabout was caused by a price war as local banks refocused on the secured housing mortgage business after suffering from mounting unsecured consumer bad debts that began in the middle of last year.
Nevertheless, Fitch Ratings warned last week that the narrowed interest margins of housing loans that were the result of keen price competition would not be sufficient to cover potential credit loss once the property market subsides, which could expose local lenders to rising risks.
cautious
Cathay Financial Holding Co (國泰金控), the nation's largest financial group by assets, told investors last month that the company had taken an extra-cautious attitude towards housing mortgages after experiencing the consumer credit problems.
As a response, Cathay has accordingly adjusted its lending portfolio through stricter credit checks for granting housing loans.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
Taiwan Power Co (Taipower, 台電) yesterday said it plans to resume operations at two coal-fired power generators for three months to boost security of electricity supply as liquefied natural gas (LNG) supply risks are running high due to the Middle East conflict. The two coal-fired power generators are at Mailiao Power Plant in Yunlin County’s Mailiao Township (麥寮). The plant, operated by Formosa Plastics Group (台塑集團), supplied electricity to Taipower’s power grid until the end of last year. Taipower’s decision came about one month after Minister of Economic Affairs Kung Ming-hsin (龔明鑫) on March 10 said that the nation had no imminent
Some robotaxi passengers were left stranded in the middle of fast-moving traffic in a major Chinese city after their driverless vehicles stopped running, according to police and media reports on Wednesday. A preliminary investigation indicates more than 100 robotaxis came to a halt because of a “system malfunction,” police in the city of Wuhan said in a statement, without elaborating. No injuries were reported. One passenger told Chinese media that their robotaxi stopped after turning a corner. An instruction on a screen read: “Driving system malfunction. Staff are expected to arrive in 5 minutes.” After no one showed up, the passenger pushed
RSS