Central bank tightens controls on housing prices
Central News Agency
2014-06-26 11:10 PM
Taipei, June 26 (CNA) Taiwan's central bank decided on Thursday at its board meeting to expand its measures to control high housing prices by reducing the amount of money banks can lend to home buyers and implementing the measures in more areas. Under the plan, eight more areas in New Taipei City and Taoyuan County will be affected, in addition to the existing 13 districts in Taipei and New Taipei. The new areas included Wugu, Taishan, Bali and Yingge in New Taipei; and Taoyuan City, Luchu, Chungli and Guishan in Taoyuan County. The bank also introduced new regulations capping the loan-to-value ratio (the amount of money banks can lend in proportion to property value) at 50 percent for buyers with at least three units of property. It also adjusted the thresholds defining luxury residential houses. The prices for luxury houses were set at more than NT$70 million (US$2.3 million) in Taipei, NT$60 million in New Taipei and NT$40 million in other regions. The bank also revised downward the loan-to-value ratio for luxury homes around the country to 50 percent, down from 60 percent. Central Bank Governor Perng Fai-nan said that since the government introduced tighter measures to rein in the housing market in 2012, transactions for luxury property have declined, but the prices have remained unchanged. Perng said he believes that if the transaction volume can drop further, the prices will likely fall in the future. Meanwhile, a housing brokerage service provider said Thursday that the bank's tighter lending measures would impact home-buyers directly and reduce speculation in the market. (By Hsu Hsiang-hsin, Wei Shu and Evelyn Kao)
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