Relax the real estate market policy! Hong Kong has launched property management | mortgage | Hong Kong
On July 7th, the Hong Kong Monetary Authority issued guidelines to banks to revise the countercyclical macro prudential regulatory measures applicable to property mortgage loans.
This is the first time since the Hong Kong Monetary Authority implemented countercyclical macro prudential regulatory measures in 2009 that it has relaxed measures targeting residential properties. The maximum mortgage amount for self use residential properties worth HKD 15 million or less has been adjusted to 70%.
Relaxing real estate policies
The President of the Hong Kong Monetary Authority, Yu Wai man, announced the relaxation of measures for the first time since the introduction of countercyclical macro prudential measures in the real estate market in 2009. The three major measures include adjusting the mortgage rate for self use properties, allowing for mortgage rates for non residential properties, and relaxing the mortgage rate based on asset level review. All measures will take effect immediately.
The first measure is to relax the upper limit of mortgage fees for residential properties for personal use: the upper limit of mortgage fees for properties below HKD 15 million is 70%; The maximum mortgage interest rate for properties between HKD 15 million and HKD 30 million is 60%; The maximum mortgage interest rate for properties above HKD 30 million is 50%. The upper limit of mortgage interest for non self use residential properties is maintained at 50%.
The second measure is to adjust non residential properties such as office buildings and shops, and increase the maximum mortgage percentage from 50% to 60%.
The third measure is to relax the upper limit on mortgage interest rates based on asset levels, increasing from 40% to 50%, applicable to residential and non residential properties.
The Hong Kong Monetary Authority emphasizes that this is the first time since its implementation of countercyclical macro prudential regulatory measures in 2009 that it has relaxed measures for residential properties. After this revision, Hong Kong citizens will be able to undertake a higher proportion of mortgage loans when purchasing properties.
The Hong Kong Monetary Authority reminds the public that real estate is an important decision in life, and when making a decision to buy a property, citizens should act within their means and prudently manage the financial risks involved. The Hong Kong Monetary Authority will continue to closely monitor market developments and will introduce appropriate measures to ensure the stability of the banking system in response to the latest developments in the property market.
Slow sales in June
In terms of property prices, based on the transaction records of residential buildings registered by the Land Registry of the Hong Kong Special Administrative Region Government and the prices of 38 representative residential estates in Hong Kong, the latest Central Plains City Index reported 165.68, an increase of 5.6% from the beginning of the year, but a decrease of 13.4% from the historical high in August 2021.
In the first half of 2023, the total number of residential building purchase and sale contracts registered in Hong Kong was 26222, with a transaction amount of 242.735 billion yuan, an increase of 30.7% and 43.2% respectively from 20069 and 169.56 billion yuan in the second half of 2022. The number and amount of cases reached a new high for three and a half years, after 34166 cases and 338.627 billion yuan in the second half of 2021.
It is worth noting that the monthly data of the Hong Kong real estate market began to decline in June. In June, there were 3613 registered buying and selling contracts with a transaction amount of 33.621 billion yuan, a decrease of 9.7% and 8.6% compared to May's 4003 and 36.769 billion yuan, respectively. The number and amount of contracts reached a new low in five months. Residential building sales have fallen for three consecutive months.
Zhang Dawei, Chief Analyst of Zhongyuan Real Estate, told China Securities News, "The Hong Kong real estate market is sluggish. Previously, various regulatory policies were very strong, and housing prices have shown a downward trend. Moreover, the impact of the US dollar interest rate hike has led to very high loan costs. Relaxing mortgages is conducive to promoting the real estate market to change houses."