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Mortgage-debt-to-GDP ratio third behind UK and Singapore
Taiwan News, Staff Writer
2014-07-30 11:27 AM

As domestic property prices skyrocket, the balance of mortgages undertaken by banks has set a new record and propelled Taiwan’s mortgage-debt-to-GDP ratio to over 50%. However, the Central Bank emphasized, even though the domestic mortgage-debt-to-GDP ratio has exceeded 50% in recent years, it is still lower than respective ratios in the U.K. and Singapore.

The Central Bank pointed out, the U.K ranked number one in the world in Q1 in terms of domestic mortgage-debt-to-GDP ratio at 80%. Singapore was second at 68%, Taiwan was ranked third at 50%, and South Korea posted 33%.

Officials explained, the quantitative easing adopted by numerous countries in Europe, the U.S., and Japan have caused asset price inflation which includes real estate. In recently years, most countries have exhibited relatively high mortgage-debt-to-GDP ratios. Quantitative easing increasing the amount of capital in the market is not a phenomenon not limited to Taiwan.

According to Central Bank statistics, the domestic mortgage-debt-to-GDP ratio has risen year after year from 38.8% during the real estate trough of 2003 to a high of 52.7% in 2009. However, since the Central Bank adopted real estate market control measures in 2010, this ratio has fallen to 51.1% at the end of last year and further to 50.3% in Q1 2014.

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