The Central Bank of Taiwan announced a sixth round of selective credit controls on the housing market on Thursday. The measures took effect Friday, limiting the second mortgage loan ratio to 60% for citizens in Taiwan’s six major cities and increasing the reserve requirement ratio of New Taiwan (NT) dollar deposits by 0.25%. 

Taiwan Industry Economics Services Director Liu Pei-chen (劉佩真) pointed out that the domestic housing market has seen both price and volume growth, and phenomena such as group buying and flash sales have been observed. She also noted that inflation remains an issue, making real estate more attractive for investment and value preservation and concluded that while the Central Bank’s new measures may slow the market in the short term, she does not anticipate a significant drop in housing prices.

National Chengchi University’s College of Commerce associate professor of finance Chang Ting-hsuan (章定煊) also offered his input, saying he believes the current banking system’s real estate lending is close to the legal limit of 40%. After analyzing the potential impact of the new measures, Chang stated that buyers who are changing houses will be most strongly affected.

During former President Tsai Ing-wen’s (蔡英文) administration, the Cabinet launched a series of comprehensive housing market stabilization programs that successfully prevented housing prices and volumes from surging too quickly. The growth suppressed at the time has now been boosted by favorable conditions, causing a sharp upturn. Chang said President Lai Ching-te’s (賴清德) administration should act to avoid an excessive surge in the housing market.