The Financial Supervisory Commission (FSC) of Taiwan reported on October 18 that the annual growth rate of mortgage loans soared to 11.27% in September, marking the highest single-month increase since the FSC began tracking this data. This growth is part of a continuous upward trend that has lasted for 16 consecutive months. Bank officials anticipate that if this strong momentum does not slow down by the end of the year, the central bank may implement its eighth round of selective credit controls to mitigate the risks of an overheated real estate market.
Statistics reveal that in the first three quarters of this year, the total balance of mortgage loans increased by NT$817.7 billion compared to the end of last year. This is a significant jump of 115% compared to the NT$380.6 billion increase during the same period last year, underscoring the ongoing real estate frenzy noted by Yang Jin-long, suggesting a serious tilt of domestic capital toward the property market.
Each month, the FSC routinely publishes data on the real estate lending situation of domestic banks. This year, mortgage balances have been on a relentless upward trajectory. In January, the total outstanding residential mortgage balance exceeded NT$10 trillion. Between May and July, the month-on-month increases surpassed NT$100 billion for three consecutive months. Although August saw a slight drop to NT$90.9 billion due to lending restrictions and the traditional mourning month, the September increase bounced back to NT$110.2 billion.
As a result, by the end of September, the mortgage balance reached a historic high of NT$10.8046 trillion, with an annual growth rate up 0.22 percentage points from the previous month. This new peak reflects the effects of the central bank’s seventh round of housing market control policies, which have yet to show their impact due to their delayed implementation. Notably, the overdue loan ratio has remained stable at 0.06% for 16 months, with overdue balances slightly increasing to NT$6.745 billion, indicating a relatively steady state as investors continue to monitor market movements following government interventions.
Bank officials attribute the robust growth in residential mortgage demand to strong exports and plentiful domestic funds, alongside a significant demand for owner-occupied housing. They also emphasize that the recent surge in new home buying is contributing heavily to mortgage growth, with banks still processing previously queued applications.
