The central bank’s new credit controls on second-home loans would have a very limited impact on the property market, as local banks generally adopt a cautious approach in dealing with mortgages in light of a weak economy, analysts said.
Moreover, most homeowners likely breathed a sigh of relief after the central bank on Thursday kept interest rates intact, as the previous five rate hikes have raised the mortgage burden to a 14-year high and cooled buying interest, Sinyi Realty Inc (信義房屋) said.
Mortgage rates have gained a cumulative 0.75 percentage points to 2.08 percent — rising above the 2 percent mark for the first time since January 2009 — implying an additional NT$70 billion (US$2.28 billion) in interest expenses as mortgages hit NT$9.4 trillion in April, Sinyi research manager Tseng Ching-der (曾敬德) said.
Photo: Hsu Yi-ping, Taipei Times
The pinch is especially evident for people who bought homes in the past three years, when housing prices spiked across Taiwan on the back of a robust economy and capacity expansions by major tech firms, Tseng said.
Property transactions started to soften in the second half of last year, dampened by interest rate hikes, an economic slowdown and unfavorable policy measures to curb property prices, he said.
Prospective buyers are likely to remain cautious after the central bank renewed credit controls by cutting the loan-to-value ratio from 75 to 70 percent on second-home mortgages in Taipei, New Taipei City, Taoyuan, Taichung, Tainan, Kaohsiung, and Hsinchu city and county, the analyst said.
The eight areas account for up to 80 percent of property transactions nationwide, he said.
The central bank aimed to send a message that “it cares” after putting policy rates on hold, in line with the US Federal Reserve, Tseng said.
Eastern Realty Co (東森房屋) said that the tighter lending terms, while unexpected, are reasonable as housing loans continue to rise despite shrinking transaction volumes.
In particular, second-home mortgages have grown unabated, the central bank said, adding that it is seeking to prevent funds from overflowing to real-estate properties and posing a threat to the financial system’s stability.
Eastern Realty said the lower loan-to-value cap would affect home buyers with relocation needs.
This group will have to set aside more money for down payments when switching houses, the broker said.
State-run Taiwan Cooperative Financial Holding Co (合庫金控) dismissed the worries, saying that lenders have by and large turned conservative about second-home mortgages.
Present loan-to-value ratios stand at 70 percent on average for second homes, the nation’s major mortgage lender said, adding that banks could show flexibility for people with relocation needs.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
RSS