The central bank intends to maintain selective credit controls on the local property market, which has seen an uptick in transactions and prices, it said in a report released yesterday, ahead of Governor Yang Chin-long (楊金龍) attending a meeting of the legislature’s Finance Committee today.
“The central bank will closely watch the property market and mortgage operations to prevent an excessive flow of credit to the property market,” Yang said in the report.
The bank is to maintain the 60 percent limit on luxury housing loans to achieve that aim, the report said.
Photo: Tyrone Siu, Reuters
Yang underscored the policy stance after acknowledging an uptrend in local property prices, whereas properties elsewhere in the world are taking a hit from diminished economic activity amid the COVID-19 pandemic.
The governor attributed the price hikes to Taiwanese companies returning from China to diversify investment risks, international technology giants stepping up investment in Taiwan and land purchases by local developers and life insurance companies.
The government has received more than NT$1 trillion (US$34.54 billion) in investment pledges from local firms that aim to shift part of their manufacturing back to Taiwan in the wake of the US-China trade dispute.
These investments would generate job opportunities and drive up income levels, which in turn would boost housing affordability and lower mortgage burdens, Yang said in the report.
The onshoring trend and the government’s encouragement of urban renewal projects have fueled optimism in the property market, he added.
The upbeat sentiment is most evident in Taichung, where presale residential project prices have posted the steepest gains, Yang said.
Overall, the pace of recovery is stronger in southern Taiwan than in the north, he said, adding that selling pressure remains in areas with heavy supply.
The central bank reportedly telephoned several lenders to convey its concern over loose mortgage standards amid reports that some bank branches are offering loans of up to 90 percent of home values to attract customers.
The practice is rare, driven mainly by excessive idle liquidity, the bank said, adding that the average loan-to-value ratio was 71.3 percent in the first half of this year.
Rather, most lenders opt to shore up their business by extending the grace period or providing favorable borrowing costs, the central bank said.
Defaults on mortgage and construction loans dropped to 0.14 percent and 0.12 percent respectively in August, lower than the overall bad loan ratio of 0.24 percent, it said.
Tax policies are more effective tools in curbing property speculation and land hoarding, the bank said.
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
Handset camera lens maker Largan Precision Co (大立光) on Sunday reported a 6.71 percent year-on-year decline in revenue for the third quarter, despite revenue last month hitting the highest level in 11 months. Third-quarter revenue was NT$17.68 billion (US$581.2 million), compared with NT$18.95 billion a year earlier, the company said in a statement. The figure was in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$17.9 billion, but missed the market consensus estimate of NT$18.97 billion. The third-quarter revenue was a 51.44 percent increase from NT$11.67 billion in the second quarter, as the quarter is usually the peak
Nvidia Corp’s major server production partner Hon Hai Precision Industry Co (鴻海精密) reported 10.99 percent year-on-year growth in quarterly sales, signaling healthy demand for artificial intelligence (AI) infrastructure. Revenue totaled NT$2.06 trillion (US$67.72 billion) in the last quarter, in line with analysts’ projections, a company statement said. On a quarterly basis, revenue was up 14.47 percent. Hon Hai’s businesses cover four primary product segments: cloud and networking, smart consumer electronics, computing, and components and other products. Last quarter, “cloud and networking products delivered strong growth, components and other products demonstrated significant growth, while smart consumer electronics and computing products slightly declined,” compared with the
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
RSS