First-time homebuyers in Hong Kong unlikely to get any help from government as Chief Executive Carrie Lam says no plans to increase mortgages

Hong Kong’s leader has made it clear her government has no immediate plans to ease the loan-to-value ratio requirement on residential mortgages, and the issue will be handled with “extreme prudence”.

Chief Executive Carrie Lam Cheng Yuet-ngor’s clarification on Tuesday was in response to speculation that such a move could be imminent after Financial Secretary Paul Chan Mo-po earlier hinted the government was considering relaxing such rates for mortgages to help first-time homebuyers.

Lam said the cost of property in the city had seen a significant increase since she took office in July 2017, even taking into account the 7.2 per cent drop between August and November last year.

Upping mortgage limits helps first-time homebuyers but may drive up prices

Reiterating that the government would not scrap or reduce the various tax-related property cooling measures, Lam said many had suggested taking care of those who could afford the loan, but not the high down payments.

However, she said any relaxation of the mortgage requirements could mean heavier burdens on loans for homebuyers, and more importantly, any issue of such signals would affect what is considered a sensitive market.

“It is not ideal if the citizens think the government is worried about the adjustment of the property market, and probably would take some measures,” she said. “The government has no immediate plans on the issue, and will be extremely prudent in moving any current measures.”