Housing construction projects to be launched in northern Taiwan in the initial period of the second half of this year will be worth only about NT$84.5 billion (US$2.84 billion), marking a three-year low, according to local media reports.
The amount was down 22 percent from the same period of last year, the reports said, adding that the government's successive moves to prevent property speculation and bleak economic outlook at home and abroad were culprit behind the decrease in new housing construction projects.
In the latest effort to cool speculative property transactions, the Central Bank of the Republic of China (CBC) announced new steps Thursday to restrict lending to luxury houses.
The following are excerpts from local media reports about new developments in real estate markets and the CBC's new regulations on bank loans to luxury homeowners:
United Evening News:
The central bank announced at the end of its second quarterly board meeting Thursday that starting June 22, bank loans to buyers or owners of houses worth NT$80 million or more in metropolitan Taipei and NT$50 million in other parts of the country should not exceed 60 percent of those properties' value and should not give any grace period of debt repayment.
CBC Governor Perng Fai-nan said at a news conference after the board meeting that previous restrictions on lending to land developers and property buyers have borne fruit.
"But new measures are needed because bank loans to luxury homeowners remain too high while interest rates are relatively low," Perng said, adding that such a phenomenon has violated risk control principle and would hinder healthy development of bank management over the long run.
Perng said most banks have established self-discipline and internal control mechanism, but some banks were found to have offered huge loans to luxury homeowners.
In some cases, the loan ratio reached 97 percent of value of the houses, Perng said, adding that such a trend should be stopped and the newly unveiled measures are designed to that effect. (June 21, 2012).
Economic Daily News:
Latest market survey show that the number of NT$1 billion worth of housing construction projects to be launched in northern Taiwan in the coming three months is only 20 while only four projects worth NT$5 billion or more each would be launched in Taipei and New Taipei.
Market sources said the government measures and gloomy economic prospects have taken toll on the housing market and many construction companies have begun investment in other lines of business, including retailing and services.
Nevertheless, housing construction in central Taiwan and some other parts of the country remains relatively brisk, the sources said. (June 21, 2012).
(By Sofia Wu)