TAIPEI (TVBS News) — Taiwan's rising mortgage rates to prompt cautious attitudes among potential homebuyers. Public banks have increased mortgage rates between 2.185% and 3.5%, and analysts expect a further rise in the fourth quarter of 2024.
The Bank of Taiwan (BOT, 台灣銀行) reports that due to regulations under Article 72-2 of the Banking Act (銀行法), banks face tighter lending conditions, impacting their mortgage quotas. The BOT aims to tighten credit by raising the reserve requirement ratio, which has led many domestic banks to approach their lending limits. Consequently, stricter loan review conditions have emerged.
The Taiwan Cooperative Bank (TCB, 台灣土地銀行) indicated that in September, new mortgage rates outside of the "Preferential Housing Loans for Youth" (新青安房貸) fell between 2.5% and 3.2%, with potential adjustments in the fourth quarter due to rising market funding costs.
The TCB analyzed that the fourth quarter will see a cautious real estate market amid the central bank's total volume control on real estate and the seventh wave of credit controls to stabilize housing prices. Buyers show increased caution under restrictions on loan-to-value ratios and grace periods.
However, factors such as a warming economic outlook, the Preferential Housing Loans for Youth program driving demand, and the year-end handover of new homes suggest that the housing market retains some momentum. With high material and labor costs, a significant drop in housing prices appears unlikely, and the market is expected to maintain a reduced volume at a stable price trend in the fourth quarter.
