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Hong Kong property
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Hong Kong’s banks pull the plug on a second unfinished housing project, halting mortgage loans to Kwai Hung’s Mangrove flats

  • Large banks avoiding mortgages for incomplete units at the same time a first for Hong Kong, brokerage CEO says
  • Mortgages for completed homes in the first eight months of 2021 jumped 23.3 per cent year on year, but those for incomplete units sank 22.9 per cent

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Hong Kong’s Central business district, where some of the city’s biggest banks are based. Recent cases of delays in the delivery of new properties and the cancellation of presales at an incomplete project could be behind lenders’ decision to avoid mortgages for uncompleted flats. Photo: Bloomberg
Lam Ka-sing

Hong Kong banks are becoming more cautious in their mortgage lending, particularly for incomplete projects built by smaller developers.

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HSBC, Bank of China (Hong Kong), Hang Seng Bank, Bank of East Asia (BEA) and Standard Chartered are among lenders that have stayed away from mortgages for uncompleted units at Kwai Hung Group’s Mangrove development, according to sources familiar with the matter. All 130 units at the development in Hung Hom will be up for sale this Saturday.

Mortgages for “incomplete units are not being approved. If you choose the [45 days] Cash Payment Plan [for incomplete units], that probably will not be approved”, said a staffer handling phone enquiries for Mangrove.

“When the bank processes mortgage applications for new projects, it will depend on different factors such as the closing period and market conditions,” a Hang Seng spokesman said in an email.

Artist's impression of the Mangrove housing complex in Hung Hom. Photo: Kwai Hung Group
Artist's impression of the Mangrove housing complex in Hung Hom. Photo: Kwai Hung Group
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BEA said it would not offer mortgages for incomplete flats at Mangrove. “Mortgage applications for uncompleted flats take time to process,” a spokesperson said. “As a result, we do not offer this type of mortgages for the Mangrove, as [that of] this project is to be completed in 45 days.” However, the bank said it “do provide mortgages for this project on a legal charge basis”, which are those drawn down when the flats are completed.

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