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.
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
RSS