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Second-home loans drop 40 percent in last two weeks

Second-home loans drop 40 percent in last two weeks

Taipei, May 28 (CNA) Taiwan's central bank said Friday that mortgage loans extended to second-home buyers have decreased almost 40 percent in the last two weeks, showing that local banks are making efforts to tighten risk control after Taiwan's outstanding housing loans set a record high in April.
According to the Central Bank of the Republic of China (Taiwan) , the outstanding housing loans reached a record NT$4.97 trillion (US$153.09 billion) in April, up NT$18.5 billion from March, while construction mortgages totaled NT$1.95 trillion, up NT$16 billion from the previous month.
The central bank pointed out, however, that the total amount of loans to second-home buyers between May 10 and May 23 dropped almost 40 percent to NT$4.4 billion compared with NT$7.3 billion in the previous two weeks (April 26-May 9) , while the loan-to-value ratio also fell from 70 percent to 65 percent.
The cost of buying a second home also increased -- with the interest rates on second-home loans increasing from 1.94 percent to 2.02 percent, it said.
Yu Chin-tang, the central bank's treasury bureau chief, explained that the growth of the housing and construction loans in April reflected public expectations of future tightening of home loans, which led to an increase in loan applications.
"This was just like the times in the past when preferential mortgage loans were approaching their deadlines, people would rush to apply for the loans at the last minute," Yu said.
He also stressed that the central bank does not want cut- throat competition on the housing loan market.
Home loan interest rates should reflect the cost of the capital, and the central bank will discuss the issue with banks if they offer what the central bank considers to be unreasonably low interest rates to clients, he said.
"It will be impossible to see a 1.5 percent home loan interest rate at present, " Yu was quoted by a media report as saying.
The biggest three lenders in the housing loan market -- the Land Bank, the Taiwan Cooperative Bank (TCB) and the Bank of Taiwan -- also cut back their lending in May.
The total housing loans extended by the three banks were reduced by almost NT$3 billion in May, with the TCB loans dropping the most at NT$2.5 billion, according to media reports.
(By Chou Ping-chun and Fanny Liu)




Updated : 2021-05-06 16:57 GMT+08:00