Taiwan mortgage policy shift sees mixed results amid tight bank lending

Following the Central Bank of Taiwan's decision to increase the maximum loan-to-value ratio for second homes from 60% to 70%, real estate activity has shown mixed results. In areas like Neihu District, there has been a slight uptick in property viewing appointments and inquiries as the lower down payment requirement eases financial pressure for some buyers.

However, actual transaction intent remains conservative. Potential buyers face significant hurdles, including stricter bank credit reviews, rising mortgage interest rates, and the lack of grace periods for principal and interest repayments. Industry experts note that while the policy adjustment helps, it has not yet triggered a broad market recovery.

Furthermore, many homebuyers are struggling to secure loans despite the policy changes. Banks are reportedly tightening credit controls and facing limited loan quotas. This difficulty is attributed to two main factors: the massive diversion of capital toward the technology sector and AI industry expansions, and banks' desire to diversify risk by reducing real estate exposure. Consequently, many banks are prioritizing industrial investment and government bonds over mortgage lending.