The central bank’s board members in September agreed to tighten lending terms to induce a soft landing in the housing market, although some raised doubts that they would achieve the intended effect, the meeting’s minutes released yesterday showed.
The central bank on Sept. 18 introduced harsher loan restrictions for mortgages across Taiwan in the hope of curbing housing speculation and hoarding that could create a bubble and threaten the financial system’s stability.
Toward the aim, it cut the loan-to-value ratio by 10 percent for second and subsequent home mortgages and denied grace periods for first mortgages if applicants already owned other residential properties.
Photo: CNA
One board director said that some people have taken advantage of the grace periods — when borrowers need only pay interest — and resold properties for profit before the grace periods expired, the minutes showed.
The director panned the practice, calling it short-term speculation that has contributed to increases in home prices — making owning a home increasingly unaffordable for people with real demand.
The director said that more forceful measures should be introduced to rein in housing credit, warning that a reversal in housing prices or a hard landing could hurt Taiwan’s financial stability.
First-time mortgage applicants who own multiple residential properties account for nearly 20 percent of applications, the central bank said.
The central bank later backed off and allowed inheritors to qualify for grace periods.
It also removed credit controls for people who have inked home purchase agreements, but have not yet secured bank loans, and for people who need to relocate for family and working reasons, as long as they sell their prior homes within a year.
Another board director said that the latest credit controls were harsher and more expansive, as they extend nationwide, rather than being restricted to the six special municipalities, as well as Hsinchu city and county, the minutes showed.
However, the success of the credit controls remain to be seen, the director said, as not all people in Taiwan need bank credit to advance their property investment plans.
Another board director pressed the central bank to remain watchful for inflation given that house rents continue to rise, with the hikes partly reflecting house price trends.
An increase in interest rates promised a better solution than tightening banks’ required reserve ratios in cooling the housing market, the director said.
UNPRECEDENTED PACE: Micron Technology has announced plans to expand manufacturing capabilities with the acquisition of a new chip plant in Miaoli Micron Technology Inc unveiled a newly acquired chip plant in Miaoli County yesterday, as the company expands capacity to meet growing demand for advanced DRAM chips, including high-bandwidth memory chips amid the artificial intelligence boom. The plant in Miaoli County’s Tongluo Township (銅鑼), which Micron acquired from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion, is expected to make a sizeable capacity contribution to the company from fiscal 2028, the company said in a statement. It would be an extended production site of Micron’s large-scale manufacturing hub in Taichung, the company said. As the global semiconductor industry is racing to reach US$1 trillion
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
Memory chip stocks extended their losses yesterday after Alphabet Inc’s Google publicized research that could allow more efficient use of the storage needed for artificial intelligence (AI) development. SK Hynix Inc and Samsung Electronics Co, South Korean leaders in the market, fell more than 6 percent and about 5 percent respectively in Seoul. In the US, Micron Technology Inc, Western Digital Corp and Sandisk Corp slid more than 2 percent in pre-market trading, after they all closed lower on Wednesday. Memory companies have been on a tear in recent months as the rapid development of AI infrastructure triggered a spike in chip
RSS