The central bank said its recent discussions about shortening mortgage periods would not affect first-time home buyers or urban renewal projects, but would be aimed at corporate buyers and multiple home owners, who are already subject to selective credit controls.
The central bank made the clarification in a statement on Saturday to calm fears that it would shorten mortgages from 30 years to 20 years during its June policy meeting in another bid to cool the housing market.
Central bank Governor Yang Chin-long (楊金龍) had told a meeting of the legislature’s Finance Committee on Thursday that there was still room for improvement regarding efforts to regulate real-estate financing, especially in areas with evident price hikes.
Photo: CNA
“House loans remain high, though stable,” Yang told lawmakers, adding that he was considering further selective credit controls, such as tightening mortgage terms and lowering loan-to-value ratios.
Property analysts said the proposed measures, if realized, would hit young first-home buyers the hardest, as their monthly mortgage payments could inflate significantly and many might default, wreaking havoc on the nation’s financial system.
People with 30-year mortgages of NT$10 million (US$335,412) would have to pay NT$49,413 per month, up from NT$35,724 at present, if they are switched to a 20-year mortgage scheme with an annual interest rate of 1.75 percent, senior property broker Lee Tung-rong (李同榮) said.
Shortening mortgage periods is a policy tool under consideration that would not apply to first-time home buyers, who have been excluded from its previous four macro-prudential measures, the central bank said.
Fresh selective credit controls, if deemed necessary at the board meeting on June 16, would only target corporate buyers, houses in hotspots and people who have third home mortgages, the central bank said.
Hotspots refer to the six special municipalities: Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, as well as Hsinchu City and Hsinchu County.
The central bank has banned grace periods for home purchases in those areas and is considering whether to cut their loan-to-value ratios, Yang said.
Lower loan-to-value ratios proved effective in cooling property fever years ago, he said, adding that stricter mortgages would also make home owners more cautious when planning their finances.
Several board members at the central bank’s March meeting said that housing price hikes bolster inflationary pressures, and the popular belief that owning real estate is the best defense against inflation suggests a need for policy intervention before it is too late.
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
Taiwan’s natural gas supply remains stable through the end of May, despite rising concerns about potential disruptions to Qatari liquefied natural gas (LNG) supplies due to escalating conflicts in the Middle East, the Ministry of Economic Affairs said yesterday. The ministry in a statement said that Taiwan has completed preparations for natural gas supply and shipping schedules through the end of May. It has also made plans to increase natural gas imports from regions outside the Middle East in June to ensure a stable supply, it added. Taiwan sources natural gas from 14 countries and is not solely dependent on the Middle East,
China is clamping down on fertilizer exports to protect its domestic market, industry sources said, putting an additional strain on global markets that were already grappling with shortages caused by the US-Israeli war on Iran. China is among the largest fertilizer exporters — shipping more than US$13 billion of it last year — and it has a history of controlling exports to keep prices low for farmers. Shipments through the war-blocked Strait of Hormuz account for about one-third of the sea-borne supply. This month, Beijing banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties, sources said. The ban, which has not
Grab Holdings Ltd agreed to buy Delivery Hero SE’s Foodpanda operations in Taiwan for US$600 million, a deal that marks its first foray outside of its Southeast Asian base. The cash acquisition will allow Grab to expand into 21 cities across Taiwan, the Singapore-based ride-hailing and delivery company said in a statement yesterday. Grab expects the transaction to be completed in the second half, subject to regulatory approvals. The purchase will give Grab a presence on the island of about 23 million people, helping it to expand beyond its intensely competitive home market. Grab has seen growth slow dramatically as it takes
RSS