Central Bank Meeting Minutes: Concerns Over Consumer Credit Expansion and Potential Real Estate Price Surge Amid Cooling Stock Market

Recently, the stock market has experienced a significant downturn, with the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) correcting by as much as 6,192 points since July. According to the summary of the monetary policy meeting minutes from the second-quarter Board of Directors and Supervisors Joint Meeting, recently released by the Central Bank of Taiwan, two directors had already expressed concerns in June about the impact of sustained credit expansion in the stock market. Some directors also raised the possibility that a cooling in Taiwan's stock trading activity could once again drive up real estate prices.

The meeting minutes indicate that one director pointed out that if the practice of using real estate as collateral for stock investments continues to expand, it could threaten financial stability, and macroprudential regulatory measures should be considered.

Another director warned that if the public becomes overly involved in stock market investments, the impact of a sharp reversal could be significant and should not be overlooked.

One director noted that if stock market trading cools down, demand for financial turnover loans related to investment would decline, and some of these funds might shift toward the real estate market, potentially further pushing up housing prices. This situation requires close monitoring. Therefore, maintaining the current selective credit control measures would preserve greater flexibility to respond to future market developments.

Another director emphasized that amid active stock market trading, maintaining stability in the real estate market—characterized by reduced transaction volume and stable prices—is essential for financial stability. As such, they supported keeping selective credit control measures unchanged.