(Bloomberg) -- Taiwan’s central bank is likely to keep interest rates unchanged on Thursday while it may tighten property buying restrictions to tame soaring home prices.

The bank in Taipei is expected to stay put due to what bank Governor Yang Chin-long said was cooling prices after its surprise hike in March. But housing costs remain stubbornly high after rising for 22 straight quarters to a record, raising expectations of further measures to calm the market. 

The central bank may tighten limits on mortgages, including by lowering the amount of money buyers can borrow relative to a property’s value. The bank last June capped the mortgage-to-value ratio for second homes in major cities at 70% and in 2021 cut that ratio for luxury homes to 40%.

It may also lower existing subsidies for first-time home buyers, originally meant to help young people buy homes, or apply curbs to more cities. 

The bank in Taipei unexpectedly raised its benchmark interest rate in March to the highest level since 2008 to control inflation, which had mostly exceeded the 2% threshold since 2021. Central bank chief Yang at the time highlighted rising electricity costs, which have been a sore point for the public and a concern for for officials.

But few expect the bank to hike rates this time around. Yang signaled last week that inflation is a fading worry and reiterated that rate hikes aren’t the main tool to address high home prices. 27 out of 28 economists surveyed by Bloomberg News expect the bank to hold rates. 

“The concern this time is mainly inflation from the electricity tariff hike, which is so far quite contained,” said Woei Chen Ho, an economist at United Overseas Bank. She added that more measures to cool housing are likely.

Taiwan’s five-year interest-rate swaps – a measure of traders’ expectations for rate hikes – fell to their lowest in about two months after Yang’s comments last week, showing there’s little speculation of another rate hike.

“While we do think inflation in Taiwan will remain higher than its pre-pandemic average, at 2%, it won’t be high enough to prompt further rate hikes from the central bank,” said Shivaan Tandon, economist at Capital Economics.

The central bank has other options to control prices, including by raising the amount of money banks must keep in reserves. The bank did that in 2022 to tighten liquidity while delivering a smaller-than-expected increase to its benchmark interest rate as officials sought to rein in inflation without slowing growth. 

The consumer price index is forecast to rise 2.1% this year and 1.8% in 2025, according to median estimates by economists surveyed by Bloomberg.

--With assistance from Cynthia Li.

(Corrects reference to a potential rate change)

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