The Central Bank of Taiwan starts to make a move to block property speculation

The Central Bank of Taiwan schedules to meet a few major banks’ supervisors to understand the situation of real estate development loans, especially when the bank undertakes land purchase loans and those developers have intentionally delayed to start construction. Former Central Bank Business Director suggested that banks must conduct on-site inspections of builders.

A director of the central bank explained that a financial institution has to implement tracking management after loan is granted for the within a certain period of time.

Once the builders postpone the start of construction, the central bank may require the bank to increase the interest rate by 1 to 2 yards, reduce the percentage of loan amount, or recall part of the loan before due date, these terms must be included into the loan agreement.

The banks must perform an on-site inspection through visiting the construction sites in order to verify the developers have actually started work as the schedule stipulated in the loan agreement, then reports to the central bank. The Land Bank and Cooperative Bank said that next year's housing loans will be curtailed, and next year's housing loans may grow at zero or negative growth.