Prop­erty rises on loos­ened reg­u­la­tions

The China Post - - TAIWAN BUSINESS -

The lo­cal prop­erty sec­tor got a boost Fri­day from a de­ci­sion by the cen­tral bank to ease credit con­trol in the do­mes­tic hous­ing mar­ket in the hope of en­cour­ag­ing home buy­ing, deal­ers said.

The prop­erty sub-in­dex closed up 2.13 per­cent at 248.24, out­per­form­ing the broader mar­ket, where the weighted in­dex ended down 0.07 per­cent at 8,305.64.

Among the gain­ing prop­erty stocks, High­wealth Con­struc­tion Corp. ( ) added 6.42 per­cent to close at NT$61.30 (US$1.91), Shin­ing Build­ing Busi­ness Co ( ) rose 4.46 per­cent to end at NT$11.70, and Huaku De­vel­op­ment Co. ( ) gained 3.39 per­cent to fin­ish at NT$57.90.

Soon af­ter the lo­cal main board opened, buy­ing in these prop­erty stocks was sparked by a cen­tral bank de­ci­sion to re­lax credit con­trol in the hous­ing mar- ket, and mo­men­tum con­tin­ued un­til the end of the ses­sion.

The cen­tral bank an­nounced Thurs­day that it had raised the ra­tio of mort­gage to home value from 50 per­cent to 60 per­cent for re­tail buy­ers in the lo­cal lux­ury hous­ing mar­ket.

The cen­tral bank cat­e­go­rizes lux­ury homes as those val­ued at more than NT$70 mil­lion in Taipei, more than NT$60 mil­lion in New Taipei, and more than NT$40 mil­lion in other ar­eas of the coun­try.

In ad­di­tion, the mort­gage ra­tio for re­tail buy­ers of a third home and for in­sti­tu­tional buy­ers such as cor­po­ra­tions has been raised from 50 per­cent to 60 per­cent.

The cen­tral bank has also de­cided that in­di­vid­u­als in cer­tain ar­eas of north­ern Tai­wan seek­ing to buy a sec­ond home will now be able to bor­row more than 60 per­cent of the value of the sec­ond prop­erty.

The ar­eas in north­ern Tai­wan spec­i­fied on the cen­tral bank’s list are Bali and Yingge dis­tricts in New Taipei, and Taoyuan, Luzhu, Zhongli and Gueis­han dis­tricts in Taoyuan.

It is the first time in five years that the lo­cal cen­tral bank has re­laxed the re­stric­tions on home mort­gages, as it has been try­ing over the past years to main­tain tight credit con­trols in a bid to rein in home prices in Tai­wan.

Tseng Ching-der ( ), a man­ager at Sinyi Realty Inc. ( )’s re­search depart­ment, said the cen­tral bank’s new reg­u­la­tions are ex­pected to boost trans­ac­tions in the lo­cal hous­ing mar­ket, which in turn will in­crease fund flows and lower liq­uid­ity risks for prop­erty de­vel­op­ers.

He said the bank’s new credit rules are a sig­nal that the gov­ern­ment is un­likely to tighten up again on the hous­ing mar­ket in the near fu­ture.

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