The nation’s five major state-run banks extended NT$96.741 billion (US$3.02 billion) in new mortgages last month, down NT$24.998 billion from the previous month and falling below the NT$100 billion mark for the first time in four months, central bank data released on Thursday showed.
The monthly decrease in new mortgages by the Bank of Taiwan (臺灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行) came with the arrival of Ghost Month, which affected property transactions, the central bank said.
Taiwanese avoid business transactions during Ghost Month, which falls on the seventh month of the lunar calendar. It began on Aug. 4 and ended on Sept. 2 this year.
Photo: Hsu Yi-ping, Taipei Times
Some local lenders might have also become conservative in extending new mortgages as their real-estate lending approaches the financial regulator’s property loan quota for banks, the central bank said.
Loans extended for residential and commercial properties may not exceed 30 percent of the aggregate of a bank’s deposits and financial debentures — or its available funds on hand, Article 72-2 of the Banking Act (銀行法) says.
Despite the decrease in new mortgages, the average mortgage rate charged by the five state-run banks rose 0.007 basis points from 2.187 percent the previous month to 2.194 percent last month, setting a new high in more than 15-and-a-half years, central bank data showed.
The rise in mortgage rates indicated that some banks were tight on funds and faced higher costs in cash flow management, forcing them to raise rates for those who were not first-home buyers, the central bank said.
It also reflected a declining proportion of the government’s preferential loans for first-home buyers in the total new mortgages, which fell from 38.23 percent in July to 35.73 percent last month, the central bank said.
Since the government’s preferential loan program carries relatively lower interest rates, a lower proportion of such loans affected the average mortgage rate less than expected, it said.
During the first eight months of this year, the five state-run banks extended NT$769.731 billion of new mortgages, a record for the period and up 79.73 percent from NT$428.281 billion a year earlier, the data showed.
The latest data came as the central bank continued its efforts to cool the domestic housing market, and contain real-estate speculation and property hoarding. At its quarterly board meeting on Thursday last week, it introduced a new round of selective credit control measures, which took effect the next day, and increased the required reserve ratio for lenders by 25 basis points, which takes effect on Tuesday next week.
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