An interest rate hike in June effectively curbed local property market prices, Central Bank of the Republic of China (Taiwan) Governor Perng Fai-nan said Friday, the day after the bank raised the benchmark interest rate for the second time this year. Perng was responding to ruling Kuomintang legislator Lin Te-fu, who questioned the government's recent policies in handling rising housing prices at a parliamentary session. The governor said that according to reports from several construction companies and property realtors, buyers of pre-sales housing and new homes had more room to negotiate in August, allowing home prices to fall by 2.8 percent from June. The central bank's policy moves had proved effective, Perng said, adding that home mortgages in Taipei City accounted for about 52 percent of total new mortgage lending, down from 59 percent in June, Perng said. Perng also said that the central bank had taken actions to 'manage risks,' not 'dampen the housing market.' He said that as more than 38 percent of total bank lending was in home mortgages recently, the financial health of the banking industry could be affected. 'So the central bank decided to 'take cautious, targeted measures,' he said. A day earlier, the central bank raised its benchmark discount rate by 0.125 percentage points to 1.5 percent, after a similar move on June 24 from a record- low 1.25 percent. The central bank introduced mortgage restrictions in June, including a 70 percent cap on loans for second homes in the Taipei metropolitan area to cool real estate prices. Meanwhile, Premier Wu Den-yih also said that the government was not dampening property markets. High housing prices are an issue in Taipei metropolitan area, but in areas south of Taoyuan, the issue is purchasing power, he said. 