Taiwan’s Central Bank Governor Yang Chin-long (楊金龍) appeared before the Legislature’s Finance Committee on Thursday to present a business report suggesting that a new wave of measures to curb housing speculation might be necessary to rein in Taiwan’s home prices.
At its third-quarter board of directors meeting in September, the Central Bank decided to implement a seventh wave of housing market credit controls, which was described as the most stringent crackdown on property speculation to date. Under the new rules, first mortgages will no longer be eligible for a grace period. Additionally, the loan-to-value (LTV) ratio, which is the percentage of the property's value financed with a mortgage, has been reduced for additional mortgages, luxury homes, corporate purchases of residential properties, and corporate use of unsold homes as collateral.
When questioned by KMT Legislator Lin Te-fu (林德福) about the recent drop in housing loans and concerns of a potential housing bubble, Yang assured that Taiwan’s banking system remains healthy. He added that the Central Bank aims to reverse the public's expectation that home prices will continue to rise indefinitely, which is what catalyzes a housing bubble.
KMT Legislator Lai Shyh-bao's (賴士葆), Lee Yen-hsiu (李彥秀), and DPP Legislator Kuo Kuo-wen (郭國文) also inquired about when the seventh wave of housing market credit controls will yield visible results. Yang acknowledged that it is unlikely to see effects within three months and the Central Bank will continue to monitor the situation with a “dynamic review,” implying that an eighth wave of credit controls remains a possibility.