Mortgates at local banks grew at a slower rate in August than in July, as demand slowed due to the implementation of new tax policies and flat housing transactions, Financial Supervisory Commission data showed yesterday.
Mortgages posted monthly growth of NT$29.5 billion (US$1.06 billion) in August from a month earlier to NT$8.44 trillion, although growth was 31 percent lower than an increase of NT$43.2 billion in July, the second-slowest monthly growth this year, the data showed.
The lower growth in mortgages was likely due to amendments of the Income Tax Act (所得稅法), which impose higher tax rates on gains from property sales within five years of purchase, the commission said. The amendments took effect on July 1, curbing real-estate speculation, it said.
The central bank’s tightening of credit controls over mortgage loans could weigh on new housing loan growth, the commission said.
The commission also said on Thursday that it warned local banks not to contravene the central bank’s credit controls, after spotting several common breaches among banks during an inspection of 10 local banks earlier this year.
Some banks that provided favorable conditions to clients who had taken out multiple mortgages told the commission that they did so because the clients claimed that the new houses were for their own use; however, the commission said that it was unlikely that a person would live in multiple houses, and the lenders should have been more careful.
Some borrowers bought and sold properties within a short period, indicating property speculation, although some lenders regardless failed to ask the borrowers about the purposes for the loans and did not apply a risk control mechanism, the commission said.
Some banks allowed borrowers to use insurance polices that were owned by others as collateral for loans to buy luxury houses, offering loans worth more than 60 percent of the value of the houses, contravening a rule that the loan-to-value ratio for luxury houses be lower than 60 percent, it said.
For clients who took loans to buy land, some banks did not request that the borrowers develop vacant land as planned, it said.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
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i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
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