Central Bank of Taiwan eases real estate credit controls

The Central Bank of the Republic of China (Taiwan) has announced a loosening of selective credit controls on the real estate market. While interest rates remain unchanged, the bank has increased the maximum loan-to-value ratio for a person’s second home from 60% to 70%. Additionally, the bank has removed the requirement for land purchase loans to include a written commitment to commence construction within a specified period, returning this oversight to bank discretion.

Central Bank Governor Yang Jin-long stated that the bank’s primary focus is maintaining financial stability and managing credit concentration in real estate to prevent systemic imbalance. He noted that while the bank is not the primary authority for housing prices, it will conduct quarterly reviews of these policies. If housing prices rise significantly, the bank may reintroduce tightening measures.

Industry representatives, including the Chairman of the National Federation of Real Estate Developers, welcomed the adjustments. They argued that the changes support genuine residential needs, such as families upgrading homes or parents assisting children, rather than speculation. The removal of the construction commencement deadline was also praised as a pragmatic response to the lengthy administrative processes involved in urban renewal and land development.