The central bank yesterday asked local lenders and cooperatives to reclaim loans and raise interest rates on loans involving land plots where construction has not started 18 months or more after purchase, citing the need to curb land hoarding.
The 18-month limit came after a closed-door meeting yesterday between the monetary policymaker and 36 local lenders and cooperatives, in which all participants agreed to the new terms, the central bank said in a statement.
The restriction is intended to prevent land hoarding, which is widely blamed for soaring housing prices, it said.
Photo: CNA
Developers have said they have no choice but to raise housing prices to reflect soaring land, labor and building material costs.
The central bank last month curtailed land financing by lowering the maximum loan-to-value ratio from 60 to 50 percent and added a clause requiring borrowers to start construction within “a certain period of time.”
Central bank Governor Yang Chin-long (楊金龍) said he would soon meet with bankers and then elaborate on the required period.
Lenders should reclaim loans on long-idle plots and raise interest rates on borrowers unless they have compelling reasons that make the delay necessary, the central bank said.
In addition, lenders should set reasonable timeframes for land financing when they process loan rollover or transfer requests to help prevent loans from spurring land hoarding, it said.
The central bank said lenders must boost responsible lending by following up on land loans through on-site inspections and other measures to document construction progress.
Lenders that fail to do so would be regarded as negligent and regulatory agencies might penalize them, it said.
The central bank reiterated that it would closely monitor real-estate lending and the property market as a whole, and would, if necessary, introduce more restrictions.
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