TAIPEI: Financial institutions have significantly decreased mortgage loans over the past five years, making it more difficult to own a home, the latest data compiled by the Joint Credit Information Center showed.
Mortgage loans dropped from 72 percent of residence values in the first quarter of 2010 to 65 percent in March of this year, due to the central bank’s credit controls and conservative evaluations by lenders, brokers said.
The center first published its mortgage data last month to support the Financial Supervisory Commission’s effort to provide the public with big data on the housing market. The center updated the figure on Tuesday, which included 34,668 deals nationwide between January and March this year.
Meanwhile, average interest rates for mortgage loans picked up from 1.83 percent to 2.09 percent, as banks took their cues from the monetary policymaker and raised borrowing costs for second homes and land financing, the center said.
The loan-to-value (LTV) ratio is lowest in Taipei at 60 percent, with mortgage loans averaging about NT$13.56 million (US$433,614), the center said.
“That means buyers have to come up with NT$8.5 million as down payment if they plan to purchase a 30 ping [99m2] house that costs about NT$60,000 per ping,” real-estate broker Pacific Realtor Co said.
This requirement is untenable for most first-time homebuyers without help from relatives, Pacific Realtor said.
Smaller 25 ping houses would require a down payment of NT$6 million, which is also unaffordable for most people, the broker said.
Even a 15 ping studio apartment in Taipei would require a down payment of NT$4 million because banks usually cap LTV ratios at 55 percent for such units, it said.
Average mortgage loans stood at 63 percent of home values in New Taipei City, down 8 percentage points from the level five years earlier when the central bank first introduced credit controls on houses in Greater Taipei.
The figures suggest down payments of about NT$3 million for a two to three-bedroom apartment, which is also a tough challenge for young people, National Realty Co said.
The LTV ratio is highest in the two eastern counties of Taitung and Hualien at 72 percent, the center’s data showed.
The LTV ratio hovered at about 67 percent in Yilan County and Taoyuan, where housing transactions increased significantly in recent years due to relative affordability.
The two brokers urged the central bank to ease credit controls since housing prices have stabilized — with transactions likely falling below the level in 2002 when the technology bubble burst.
Last month, central bank Governor Perng Fai-nan said credit controls should remain in place for a while, despite the bank’s success at cooling the market.
