Yang Chin-long: Housing price declines still slow, observing New Youth Housing 2.0, no short-term easing of controls

(Central News Agency, Taipei, June 18) The Central Bank held its second-quarter board meeting today, deciding to keep interest rates unchanged and not relax housing market controls. Central Bank Governor Yang Chin-long stated directly that domestic housing price corrections are limited, and with the upcoming launch of New Youth Housing 2.0, time is needed to observe its impact on the housing market, so controls will not be eased in the short term.

Yang Chin-long's earlier remarks in the Legislative Yuan, "Housing market controls stop here," sparked heated discussion, and even led to a celebratory rally in construction stocks.

However, at today's Central Bank board meeting, all directors unanimously agreed not to adjust the selective credit controls. Yang Chin-long cited three major reasons, stating directly that housing market controls will not be relaxed in the short term.

Yang Chin-long first clarified the original meaning of "stop here." He explained that the intention was to convey that the Central Bank would continue to monitor and review selective credit controls on a rolling basis, with decisions made by the board.

Yang Chin-long then explained the three major factors for not easing controls this time. First, although the ratio of real estate loans to total loans for all banks (real estate loan concentration) has decreased from a high of 37.6% at the end of June 2024 to 35.2% by the end of May this year, the funds have flowed into the stock market, not into real productive enterprises as the Central Bank had hoped.

Second, domestic housing price corrections are limited, and the burden of homeownership for the public remains heavy. Since the pandemic, Taiwan has seen the largest cumulative increase in housing prices among major economies, and the domestic housing price-to-income ratio remains high.

Third, attention must be paid to the potential impact of real estate-related policies on the housing market, such as the upcoming New Youth Housing 2.0.

When asked by the media if the Central Bank needing time to observe the impact of New Youth Housing 2.0 means that housing market controls will not be relaxed in the short term, Yang Chin-long replied, "Indeed, observation also takes some time."

Regarding whether the launch of New Youth Housing 2.0 will repeat the situation of the 1.0 program triggering a housing market boom, Yang Chin-long believes it should not. On one hand, individuals with home purchase needs may have already entered the market during the 1.0 period. On the other hand, the 1.0 New Youth Housing program did indeed relax some measures significantly, thus having a notable impact on the housing market with loans quickly increasing. However, the 2.0 program is slightly tighter, "My personal judgment is that it should not be like last time."

Yang Chin-long also said that if people want to wait for housing prices to correct before buying a home, "this is a good judgment, a very rational judgment." (Editor: Yang Lan-hsuan) 1150618

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