The nation’s major lenders saw their home mortgage portfolios shrink last month compared with July as the central bank stepped up credit checks to cool the residential real estate market.
Home mortgage loans for Land Bank of Taiwan (土地銀行), which outperformed its peers in home financing, totaled NT$627.9 billion (US$19.65 billion) at the end of last month, down 0.3 percent from NT$629.8 billion a month earlier, an official from the lender’s consumer banking division said.
The official, who refused to be named, attributed the decline to the central bank’s selective credit controls and the timing of Ghost Month — the seventh month of the lunar year — which this year began on Aug. 10 and ends today.
The bank recently asked lenders to file reports on construction and land loans operations and painted the move as “a quarterly routine” in a statement last week. The central bank has since June asked lenders to lower home loans and cancel grace periods on principal payments for second home financing in all of Taipei City and 10 areas of Taipei County where housing prices surged in recent years.
Taiwan Cooperative Bank (合作金庫銀行), the second largest home mortgage operator, saw its home loans drop 0.87 percent to NT$578.8 billion from NT$583.9 billion, said a bank manager, who also requested anonymity.
The manager said the bank’s tightening, while mild, has prompted potential homebuyers to have second thoughts about purchases.
“Some buyers would rather stay on the sidelines for fear the central bank may adopt more and even stricter tightening measures to boost borrowing costs,” the manager said.
Many economists have said the central bank will raise the benchmark interest rates by 12.5 basis points at its quarterly policy meeting later this month and in December to rein in property prices.
Bank of Taiwan (臺灣銀行) and First Commercial Bank (第一銀行) told reporters their home loans fell by NT$1 billion and NT$2.5 billion respectively last month, compared with a month earlier. Hua Nan Commercial Bank (華南銀行) also saw its home loans decline by NT$1.5 billion last month.
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