TAIPEI (Taiwan News) — The outstanding balance of housing loans issued by domestic banks in Taiwan reached a new high of NT$10.6 trillion (US$332 billion) as of the end of July, the Financial Supervisory Commission (FSC) said Tuesday (Aug. 27).

The figure represents a net increase of NT$616.61 billion in the first seven months of the year. It already accounts for nearly 94% of the projected annual growth in housing loans in 2023, per CNA.

July is the third consecutive month that the monthly growth has exceeded NT$100 billion. The year-over-year (YOY) growth rate of housing loans in July reached 10.82%, the highest in over 18 years, per CNA.

The YOY growth rate for the first seven months of the year surged to 10.84%. Post-pandemic economic recovery, increased housing demand, and construction project competition are the primary factors leading to the increase in loans. 

Construction loans also saw a rise, reaching nearly NT$3.72 trillion as of July, up 3.54% from a year earlier. This increase was attributed to government-backed urban renewal projects and rising construction costs leading to higher working capital needs.

To prevent excessive concentration of real estate loans, Taiwanese law limits commercial banks' total loans for residential and commercial construction to 30% of their deposits and financial bonds. Banks often impose even stricter internal limits.

As of July, the total amount of loans for residential and commercial construction issued by 36 domestic banks (excluding the Land Bank of Taiwan and the Export-Import Bank of the Republic of China) increased by NT$0.15 trillion to NT$14.86 trillion. The total amount of deposits and financial bonds issued increased by NT$0.58 trillion to NT$55.85 trillion.