A government program launched in August 2023 that allowed designated state-run banks to offer preferential loans to first-time homebuyers — especially young people — helped rekindle a hot housing market last year. The program, which offered more flexible and favorable terms, led some lenders to hastily increase their property loans in the short term, pushing housing prices up.
The central bank in August last year told lenders to propose plans to cool their real-estate lending — which had rapidly approached the regulatory ceiling of 30 percent of total loans. A month later, the central bank implemented its seventh round of selective credit controls to limit mortgage eligibility and cool the market. In the months that followed, the media and commentators criticized the credit tightening as sparking a “mortgage drought,” despite the Executive Yuan’s repeated assurances that the government had not imposed restrictions on housing loans. At the same time, mortgage applicants complained to lenders about restrictions, delayed loan approvals, adjusted mortgage terms and requirements to buy insurance or other financial products bundled with the mortgages.
To address the issue, the Executive Yuan on Thursday announced that mortgages extended under the government’s preferential loan program would no longer count toward the 30 percent lending cap set by Article 72-2 of the Banking Act (銀行法), retroactive to Sept. 1. The measure ensures lenders cannot reject qualified applicants by citing the loan quota. It is also meant to ensure that funds go directly to first-time homebuyers without fueling speculation in the housing market.
The move, which is undoubtedly the correct decision, is expected to alleviate abnormal shrinkage and stagnant trading in the housing market, helping restore market confidence after housing transactions across the six special municipalities plunged 32.1 percent year-on-year last month and were down 27.6 percent annually in the first eight months of the year, government data released last week showed.
The double-digit percentage declines across all six special municipalities underscore a drastic cooling from the previous market boom, and market watchers view the latest easing as a shot in the arm for the housing market. For investors, it remains to be seen whether the change would cause falling housing prices to rebound or if it is just temporary relief and the market would need longer than expected to completely recover.
After all, buying a home requires high financial leverage and any adjustments in government policies would have a greater effect on homebuyers. People need to plan carefully, as the government’s preferential loan program is limited to some designated state-run banks, while mortgages from most other lenders are still subject to the central bank’s selective credit controls and the average mortgage rate has risen to a nearly 16.5-year high, meaning the vast majority of homebuyers would still face lower loan-to-value ratio pressures, but higher mortgage rates.
Prospective buyers also have to carefully assess their finances, as their quality of life is tied to their wages and how fast they increase, in addition to the preferential loan program.
The latest data compiled by real-estate brokerages showed that the average down payment for homebuyers aged 20 to 40 in Taiwan increased to NT$3.43 million (US$112,378) in the first half of this year, up NT$235,000 from the same period last year, with those in Taipei facing the largest down payment of NT$6.68 million, nearly NT$1 million more than a year earlier.
Taiwan stands at the epicenter of a seismic shift that will determine the Indo-Pacific’s future security architecture. Whether deterrence prevails or collapses will reverberate far beyond the Taiwan Strait, fundamentally reshaping global power dynamics. The stakes could not be higher. Today, Taipei confronts an unprecedented convergence of threats from an increasingly muscular China that has intensified its multidimensional pressure campaign. Beijing’s strategy is comprehensive: military intimidation, diplomatic isolation, economic coercion, and sophisticated influence operations designed to fracture Taiwan’s democratic society from within. This challenge is magnified by Taiwan’s internal political divisions, which extend to fundamental questions about the island’s identity and future
Taiwan People’s Party (TPP) Chairman Huang Kuo-chang (黃國昌) is expected to be summoned by the Taipei City Police Department after a rally in Taipei on Saturday last week resulted in injuries to eight police officers. The Ministry of the Interior on Sunday said that police had collected evidence of obstruction of public officials and coercion by an estimated 1,000 “disorderly” demonstrators. The rally — led by Huang to mark one year since a raid by Taipei prosecutors on then-TPP chairman and former Taipei mayor Ko Wen-je (柯文哲) — might have contravened the Assembly and Parade Act (集會遊行法), as the organizers had
The narrative surrounding Indian Prime Minister Narendra Modi’s attendance at last week’s Shanghai Cooperation Organization (SCO) summit — where he held hands with Russian President Vladimir Putin and chatted amiably with Chinese President Xi Jinping (習近平) — was widely framed as a signal of Modi distancing himself from the US and edging closer to regional autocrats. It was depicted as Modi reacting to the levying of high US tariffs, burying the hatchet over border disputes with China, and heralding less engagement with the Quadrilateral Security dialogue (Quad) composed of the US, India, Japan and Australia. With Modi in China for the
The Chinese Nationalist Party (KMT) has postponed its chairperson candidate registration for two weeks, and so far, nine people have announced their intention to run for chairperson, the most on record, with more expected to announce their campaign in the final days. On the evening of Aug. 23, shortly after seven KMT lawmakers survived recall votes, KMT Chairman Eric Chu (朱立倫) announced he would step down and urged Taichung Mayor Lu Shiow-yen (盧秀燕) to step in and lead the party back to power. Lu immediately ruled herself out the following day, leaving the subject in question. In the days that followed, several
RSS