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.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
The government yesterday approved applications by Alphabet Inc’s Google to invest NT$27.08 billion (US$859.98 million) in Taiwan, the Ministry of Economic Affairs said in a statement. The Department of Investment Review approved two investments proposed by Google, with much of the funds to be used for data processing and electronic information supply services, as well as inventory procurement businesses in the semiconductor field, the ministry said. It marks the second consecutive year that Google has applied to increase its investment in Taiwan. Google plans to infuse NT$25.34 billion into Charter Investments Ltd (特許投資顧問) through its Singapore-based subsidiary Fructan Holdings Singapore Pte Ltd, and
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
RSS