Taiwan’s ongoing selective credit controls enjoy broad public support as tighter mortgage rules help cool transactions and ease upward pressure on housing prices, according to a survey released yesterday by Evertrust Rehouse Co (永慶房屋).
The findings could encourage the central bank to extend restrictive lending terms at its quarterly board meeting next week.
Fifty-three percent said the latest round of credit tightening introduced in September last year has helped restrain price increases, while nearly 60 percent believe it has curbed speculative activity, Evertrust research manager Daniel Chen (陳賜傑) said, citing the quarterly online survey.
Photo: CNA
Sixty-eight percent supported extending the measures through next year, underscoring persistent public concerns that home prices could rebound if the central bank loosens restrictions, Chen said.
The central bank is scheduled to review real-estate lending rules on Thursday next week to assess their effectiveness in cooling property lending, which approached a record high in summer last year and risked turning into a housing bubble, central bank Governor Yang Chin-long (楊金龍) said at the prior policy meeting.
The property market has since slowed, as lenders tightened mortgage terms, reduced loan-to-value ratios and lengthened the application process to as long as six months from about one month previously. Borrowers must also demonstrate stronger income qualifications to obtain mortgages.
Housing transactions and prices have softened, a trend expected to persist into next year if the central bank maintains its restrictive stance, Chen said.
Tougher financing requirements have prompted investors to retreat from the market, allowing genuine homebuyers to dominate demand and bringing conditions closer to real supply-demand fundamentals, he said.
“Property fever has evidently cooled for the past 15 months,” Chen said, adding that the public strongly favors preserving an environment friendly to buyers with self-occupancy needs.
People worry that if the measures are withdrawn too soon, prices could surge again, squeezing affordability for first-time buyers and owner-occupiers, Chen said.
Separately, Taiwan’s presale housing market flashed a “yellow-blue” light last month — indicating contraction — according to a monthly survey by My Housing Monthly (住展雜誌).
A wave of year-end presale launches boosted supply, but buying momentum failed to keep pace, said Chen Ping-chen (陳炳辰), the magazine’s research chief and spokesman.
Presale project launches increased, while the number of newly completed homes declined. Other market indicators — visitor traffic, transaction volumes, bargaining rates and the number of projects available for sale — were largely unchanged, pointing to a weak, directionless market with no clear recovery in buying sentiment, Chen Ping-chen said.
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