Several banks in Taiwan have reportedly reached lending capacity and have raised interest rates on mortgages. This trend could burden property buyers and renters.
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00:00Homebuyers in Taiwan have long had to compete with high prices,
00:04but now mortgages are getting more expensive as well.
00:07Several banks are raising interest rates on new applications
00:10and putting a limit on the number of loans they offer
00:13while the government investigates the situation.
00:15We are now trying to understand
00:17what causes the so-called modernization of the market.
00:23We also need to understand
00:24whether there is such a modernization problem in the market.
00:27The monthly mortgage rate in state-owned banks sits at 2.185 percent.
00:32That's the baseline.
00:34Now many of them have scaled up their range to 3 percent.
00:37The rising interest rates have deterred many investors,
00:40but the demand for mortgages remains high among young buyers.
00:44Since 2010, the government has a policy
00:47to help younger generations buy their first homes.
00:50That policy, officially named
00:52Preferential Housing Loans for the Youth,
00:54offers new homeowners a loan of over US$300,000
00:58and below market interest rates.
01:01Now their options for housing may be more limited than ever.
01:04As homeowners won't let go of their old houses,
01:07young buyers have to turn to new-build projects
01:09instead of cheaper older houses.
01:12And more investors are bidding on pre-sale homes,
01:14driving up prices.
01:16As landlords are paying more for their new investment,
01:18this could also mean higher rents for the tenants.
01:21Many investors may transfer the increased interest
01:25to the rents.
01:27Of course, the end result is that
01:29the tenants will have to pay high rents.
01:33They are likely to be the most affected.
01:36Some suspect government policy
01:38is what's driving up the demand for loans
01:40and consequently interest rates.
01:42No matter the cause,
01:44renters and young buyers are still scrambling
01:46to find a roof to put over their heads.
01:48Justine Wu in Nyingling for Taiwan Plus.