Taiwan’s housing market could experience short-term relief after the Executive Yuan yesterday approved a plan to exempt first-time homebuyers from loan restrictions, a move designed to ease a tightening in credit while reassuring the public it would not reignite property speculation.
Retroactive to Monday, mortgages issued under a state-backed program for first-time homebuyers would no longer count toward the 30 percent ceiling on property lending imposed by the Banking Act (銀行法), Financial Supervisory Commission Chairman Peng Jin-lung (彭金隆) said.
The adjustment gives state-run banks, the exclusive providers of the preferential program, more room to lend. That might help ease a “mortgage drought,” in which loan approvals have been delayed or curtailed amid banks’ efforts to stay within regulatory limits.
Photo: Claire Cheng, Taipei Times
“Banks have a social responsibility to support first-time homebuyers and we recognize this need,” Peng said.
Authorities stressed that the relaxation is intended to serve genuine housing demand, not fuel speculative activity.
Peng added that while the FSC oversees banking regulations, mortgage operations involve coordination across several government departments.
The program, launched in August 2023, offers subsidized interest rates, a five-year grace period and loan-to-value ratios of up to 80 percent for first-time home purchases. Since its inception, it has approved nearly 130,000 mortgages worth more than NT$990 billion (US$32.2 billion), data compiled by the Ministry of Finance showed.
Applications, which peaked at more than 8,000 cases per month last year, dropped sharply to about 3,000 in July, Deputy Minister of Finance Frank Juan (阮清華) said.
More than 70 percent of borrowers were younger than 40, underscoring the program’s role in addressing real housing demand, he said.
The easing should help revive some loan momentum, he added.
The Cabinet also urged state-run banks to maintain favorable lending terms for buyers facing relocation needs due to changes in family size or employment.
Real-estate analysts welcomed the decision, but cautioned that the broader housing sector remains under pressure from lingering credit curbs and a slowing economy.
“The new policy helps ease challenges faced by first-time buyers, such as insufficient loan-to-value ratios, long approval times or requirements to bundle mortgage insurance,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said yesterday.
The adjustment should also aid buyers of presale homes by ensuring smoother handovers and preventing transactions from stalling, she said.
Smaller builders have voiced worry that financing gaps could lead to defaults and even bankruptcies, if buyers pull back.
At the same time, the property market continues to grapple with uncertainty over US tariffs that are eroding the competitiveness of non-tech exporters, Chen said.
H&B Realty Co (住商不動產) chief researcher Jessica Hsu (徐佳馨) called the move “a shot of adrenaline” that could provide quick relief to the market.
However, the long-term impact remains to be seen, as stricter terms still apply to second-home and luxury property mortgages, she said.
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