TAIPEI (Taiwan News) — Taiwan Realty Estate Co. said Monday that despite a cooling housing market, homebuyers aged 35 and under continued to be a significant force, accounting for 33.2% of all mortgage loans in Taiwan during the first quarter of this year.
Southern cities led this trend, with Tainan and Kaohsiung topping Taiwan's six major cities, where young homebuyers secured 36.8% and 36.5% of mortgages. Taoyuan followed at 35.7%, with Taichung and Greater Taipei also showing significant shares, per CNA.
In August 2023, the government launched preferential housing loans for young buyers, which boosted their willingness to purchase homes. The share of young homebuyers nationally increased from 29.8% in 2023 to 31.7% last year.
According to the real estate company, the share of young homebuyers in Taipei increased from 17.3% in 2020 to 23.8% in the first quarter of this year, marking the highest growth among Taiwan's six major cities. The primary reason for this rise is attributed to the impact of housing loans for young buyers. The other five cities also saw an approximate 4% increase over the past six years.
The housing loans for young buyers allow for a maximum loan-to-value ratio of 80%, a repayment period of up to 40 years, and a loan ceiling of NT$10 million (US$319,488). The company added that most young homebuyers in Taiwan prioritize total price when purchasing a home, which leads them to favor properties that are older, smaller in size, and located farther from city centers.
However, the implementation of the loan program has also contributed to a rise in housing prices nationwide. In Hsinchu, home prices rose by more than 10% last year compared to 2023, followed by Taoyuan with a 7.4% increase and Tainan with 6.1%. The remaining three major cities also saw price increases of around 5%.
The Ministry of Finance reported that from August 2023 to July 2024, Taiwanese banks approved loans for 73,100 borrowers under the program, with the total loan amount exceeding NT$540 billion.
Several Taiwanese banks saw housing loans account for nearly 28% of their total assets last year. To address this, the government has introduced a series of measures, including limiting the proportion of funds allocated to home loans to under 30% of banks' total capital, implementing stricter eligibility criteria for applicants, and raising the interest rates on mortgage repayments.
