Zhang Yingwei, chairman of Baohe Construction, believes that under the double attack of bank capital tightening and loan restrictions, the real estate market will show two major development trends in the future.
In the past five years, Taiwan's overall investment environment has faced unprecedented rapid changes due to the interweaving of multiple factors such as the COVID-19 epidemic, the central bank's continuous credit controls, and the continued outbreak of artificial intelligence (AI). Experts point out that the main lending force of Taiwanese banks has undergone structural adjustments, and funds are gradually shifting from traditional construction and development companies to high-tech industries. At the same time, the real estate market is also becoming normalized under the dual constraints of policies and funds, and the residential market has officially bid farewell to the era of pure arbitrage.
Yang Kangping, associate director of Baohe Construction, said that the period from 2021 to 2023 is the transition period from "after the epidemic to before the outbreak of the AI industry". At that time, real estate was one of the main lending targets of banks. In order to curb the overheated housing market, the government has launched multiple credit control measures. The subsequent "loan restriction order" has become a curse for home buyers, successfully cooling the market transaction volume and housing prices.
Subsequently, the AI wave broke out in full force, and Taiwan's stock market ushered in a boom. Taiwan relied on its solid technological strength to successfully attract a large number of international companies to set up factories and invest in Taiwan. This huge wave of technology not only drives industrial transformation, but also further expands banks’ lending business and business opportunities in the technology industry.
In addition to changes in industry prospects, banks' own capital adequacy ratios (BIS) are a key driver of this wave of fund transfers. According to current regulations, the risk coefficient of real estate lending (such as residential land purchase loans and surplus house loans) is currently as high as about 150%. In comparison, the risk coefficient of general corporate loans is only between 20% and 150%, and most high-quality technology industry loans have extremely low risk weights.
Yang Kangping believes that under the same conditions of lending 100 million yuan, undertaking real estate loans will consume more capital of the bank. Under the constraints of limited capital scale, banks are naturally more willing to lend money to companies with low risk factors and stable returns based on capital return rates and risk considerations. In a short period of time, it will be difficult for banks to regard real estate lending as their only core business. "Lending on the basis of merit" has become the collective consensus of private banks.
Zhang Yingwei, chairman of Baohe Construction, analyzed that under the double attack of bank capital tightening and loan restriction orders, the real estate market will show two major development trends in the future. The first is that builders will slow down their project promotion; due to the limited financing amount and strict review of civil construction, construction developers are facing challenges in capital allocation, and their project promotion strategies will turn conservative and the pace will slow down.
Secondly, people will be cautious when buying houses: it is becoming more difficult to apply for mortgage loans, home buyers will be more prudent in the use of financial leverage, and market buying sentiment will return to rationality. Zhang Yingwei emphasized that with policy guidance and market reshuffle, housing is no longer a quasi-financial product with high investment returns and easy arbitrage in the past, but has returned to real residential needs. The future housing market will gradually move towards a new pattern of steady development under a healthy supply and demand structure.
