Hong Kong relaxes decade-old lending curbs, granting more mortgages to homebuyers and offices to bolster city’s ailing property market
- Homes worth less than HK$30 million (US$3.83 million) will be entitled to 70 per cent mortgage financing, compared with the previous 60 per cent credit
- Residential properties that are valued at more than HK$35 million, considered luxury homes in Hong Kong, will be entitled to 60 per cent mortgage, from 50 per cent
Hong Kong’s monetary authority has relaxed the city’s decade-old lending curbs, granting more mortgage borrowing to homebuyers, rental property and offices, after high interest rates turned the city’s real estate bull run into a slump.
Starting immediately, homes valued at less than HK$30 million (US$3.83 million) will be entitled to 70 per cent mortgage financing, compared with the previous rule that granted only 60 per cent credit to flats valued between HK$15 million and HK$30 million, according to the Hong Kong Monetary Authority (HKMA).
Residential properties that are valued at more than HK$35 million, considered luxury homes in Hong Kong, will be entitled to 60 per cent mortgage, from 50 per cent previously, according to the HKMA. Properties between HK$30 million and HK$35 million are now eligible for loan-to-value ratios between 60 and 70 per cent.
For rental properties that are not used by owners, the maximum loan-to-value ratio will be increased to 60 per cent, from 50 per cent. Extra leeway will also be given to offices, retail shops and industrial buildings, where the loan financing ratio will be lifted to 70 per cent, from 60 per cent.
“After the relaxations, almost all the countercyclical macroprudential measures have been rolled back to 2009 when they were first introduced,” HKMA CEO Eddie Yue Wai-man said in a media briefing after the announcement.