The nation’s housing market fared well in the first quarter, given that the average loan-to-value (LTV) ratio stood at 69 percent with a mortgage interest rate of 1.76 percent, a report by the Joint Credit Information Center (金融聯合徵信中心) showed.
The result was better than for the same period last year, despite a mild slowdown compared with the previous quarter.
Homeowners in Tainan enjoyed the most favorable mortgage terms among the six special municipalities, with an LTV ratio of 71.07 percent and a mortgage interest rate of 1.73 percent, the report found.
Taipei reported the lowest LTV ratio at 65.28 percent, followed by New Taipei City at 68.4 percent, it said.
Mortgage interest rates registered 1.75 percent in the capital and 1.76 in New Taipei City, which was on par with the national average.
Soaring home prices in the greater Taipei area prompted lenders to adopt a conservative approach in dealing with mortgage applications, Great Home Realty Co (大家房屋) head researcher Mandy Lang (郎美囡) said yesterday, adding that increasing unaffordability and ongoing price corrections merit caution.
Home owners in Taoyuan paid the highest interest, at a rate of 1.81 percent, with an LTV ratio of 70.91 percent, it found.
The LTV ratios were 70.37 percent in Taichung, 71.01 percent in Tainan and 70.88 percent in Kaohsiung, while the cities’ interest rates ranged between 1.73 percent and 1.76 percent, it said.
A relatively high self-occupancy rate in southern Taiwan enabled banks to demonstrate more flexibility in handling the LTV ratio, Lang said, adding that investment fund inflows explained why interest rates are highest in Taoyuan.
Low interest rates would not be maintained for long, as global central banks might take cues from the US Federal Reserve and normalize their monetary policy stances, H&B Realty Co (住商不動產) researcher Jessica Hsu (徐佳馨) said.
Taiwan would likely take a slower approach if it does hike interest rates, raising them by 12.5 basis points each time, Hsu said.
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