Exclusive | Hong Kong Monetary Authority asks banks to exercise caution when offering property loans for speculative ‘confirmor sales’
- HKMA expects banks ‘to put in place effective risk-management policy, procedures and controls to manage the additional risks associated with such transactions’, according to email seen by the Post
- But industry observers say removal of property curbs is unlikely to lead to a revival of confirmor sales
Hong Kong’s de facto central bank “expects banks which offer mortgage loans for confirmor transactions to put in place effective risk-management policy, procedures and controls to manage the additional risks associated with such transactions”, the HKMA said in an email to banks in the city seen by the Post.
“Banks are welcome to discuss with the HKMA if they currently offer, or plan to offer, mortgages for confirmor transactions.”
A confirmor sale occurs when a purchaser or confirmor enters into an agreement for the sale and purchase of a property with the owner or vendor, but before completion sub-sells the property to a sub-purchaser. A few such transactions have been noticed since the removal of the curbs by the Hong Kong government last week.
Confirmor sales usually involve speculators seeking short-term capital gains. For instance, the recent buyer of a second-hand flat in a housing estate in Sha Tin has immediately increased the asking price of the property by 15 per cent, according to local media reports.
