The central bank met with eight local lenders on Thursday to call for restraint in real-estate financing, which approached a record high in September, sparking concern that it might drive up property prices.
The meeting came less than a week after the monetary policymaker’s talks on Friday last week with six mortgage operators to convey its concern over loose lending.
“Banks should better manage their resources to prevent an overflow of credit to the real-estate market, which indirectly encourages property speculation and land hoarding, and contributes to property price hikes,” the bank said in a statement.
Photo: Wu Chi-lun, Taipei Times
Government data showed that commercial property and land deals last quarter soared at paces rarely seen in recent years, bucking sharp declines around the world amid the COVID-19 pandemic.
Property analysts have attributed the fast pickup to Taiwan’s stable economy and quick control of the outbreak, with low interest rates and ample liquidity also lending support.
The central bank in March cut the rediscount rate to a record low of 1.125 percent to ease households’ financial burden, but that inadvertently became an incentive for property investment after Taiwan emerged from the outbreak in May.
As of September, real-estate lending stood at 35.8 percent of total outstanding loans, close to the historical peak of 37.9 percent, the central bank said, adding that several banks are approaching the limits for mortgage, construction and land financing.
Local banks have offered generous loans at cutthroat borrowing costs and with protracted grace periods, as they vie for customers, the bank said.
Lax lending includes unreasonable loan-to-value ratios, failing to monitor the progress of property developments and easy loans for unsold housing units, it said.
Such practices encourage land hoarding and excessive leveraging that are pushing up property prices, posing a threat to the health of the nation’s property market and financial system, the bank said.
“Lenders must take up their social responsibility and guide funds to real investment that can create job opportunities and boost income rather than overly concentrating on property lending,” the bank said.
Small and medium-sized companies affected by the pandemic can use help from financial institutions, it said.
Central bank Deputy Governor Chen Nan-kuang (陳南光) has several times expressed concern over the formation of a property bubble and pressed for pre-emptive measures to reverse the trend.
The central bank said it has sent officials to visit lenders to see if they exercise due caution when handling real-estate loan requests.
It denied that such visits are “formal inspections.”
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
RSS