Editorial | A small measure of help for homebuyers
- Relaxing mortgage requirements might help some to purchase flats that are larger than a car parking space
Hong Kong people need and deserve larger and more affordable flats, not nano flats. New measures introduced in the budget will, hopefully, encourage the local property market to move in that direction. The amounts of mortgages available have been raised to help buyers, with the loan-to-value ratio of 80 per cent increased to a maximum of HK$12 million (US$1.5 million) from HK$10 million. First-home buyers who qualify for the higher 90 per cent can now borrow up to HK$10 million from the previous HK$8 million.
Meanwhile, from the financial year 2023-24, owners of multiple residential properties will only qualify for tax rebates with their self-occupied home, instead of all residential premises.
The new measures are expected to boost demand in the residential property market for flats larger than 200 sq ft, that is, the so-called nano flats or micro apartments. The market for these flats has grown because their prices – often below HK$10 million, despite often offering little better than car-parking spaces – appeal to many first-home buyers. About 2,015 are due for completion this year, the highest number since they first emerged in 2013. By making more mortgage loans available, at least to those with steady incomes, larger homes should be more easily within reach. Additionally, higher taxes on multiple properties is likely to discourage more people from hoarding homes, thereby releasing more flats onto the market.
An analysis by Centaline Property Agency estimates that the turnover of homes worth between HK$8 million and HK$19 million may jump by 30 per cent as a result of the new measures. The policy can also help speed up home-buying decisions and increase the number of buyers by 20 to 30 per cent.
Since the social unrest of 2019, officials and many analysts have argued that livelihood issues are at the root of social discontent and that the middle class has been among those most disaffected. Inadequate housing has been among their top concerns. High liquidity and low borrowing costs have pushed property prices out of reach for many. It is, therefore, a policy priority for the government to provide more and bigger affordable homes. While that will take time, the new budget has made a decent start with viable measures.
