Sun Hung Kai Properties offering loans worth 120pc of flat value to boost sales of Yuen Long project

Sun Hung Kai Properties (SHKP) surprised the market on Wednesday by offering an unprecedented home loan worth as much as 120 per cent of the flat value without the need to submit income proof in order to woo buyers for its new project in Yuen Long.

Buyers of SHKP’s Park Yoho Venezia who opt for the “King’s Key 120” scheme will receive a three-year financing loan up to 120 per cent of the flat’s value, much higher than the standard bank mortgage ceiling of 60 per cent for flats below HK$10 million, and 50 per cent for those more than HK$10 million.

The offer only applies to buyers who already own an apartment with value no less than 70 per cent of the would-be purchase price of the Park Yoho Venezia flat. The loans would be provided by SHKP’s finance company which is not subject to regulatory supervision by the Hong Kong Monetary Authority (HKMA). Buyers are only required to pay interest in the first year but must begin repaying interest and principal from the second year.

“Developers are basically lending money to buyers to purchase their units. It is an obvious sign that developers want to speed up sales. If they do not act fast now, they may have to sell at a price lower than today,” said Nicole Wong, CLSA regional head of property research.

She said other developers with projects in nearby areas would be forced to follow suit to provide similar home loan packages in a fight to secure buyers.

“It is the most aggressive plan I’ve ever seen in the market,” said Sammy Po, chief executive at Midland Realty’s residential department. “During the last market doldrums more than 10 years ago, developers provided home loan of 110 per cent of the flat value, even to first home buyers.”