\nBuyers are being tempted by 120 percent mortgages
\nAnother day, another dollar. Image credit: Krystal T (Flickr)
\nNon-banking lenders are getting a tad too generous.
\nThis was the view of the Hong Kong Monetary Authority regarding the phenomenon of high mortgage loan-to-value ratios being bandied by property developers recently to ride out falling home prices.
\nIn a statement, Arthur Yuen, deputy chief executive of the Hong Kong Monetary Authority, warned that developers providing such mortgages will indirectly increase banks\u2019 credit risks.
\n\u201cWe have been in communication with banks to study whether we will need appropriate measures to strengthen risk management over banks financing developers that provide high mortgage lending,\u201d Yuen said.
\nThe Hong Kong central bank currently caps mortgages for properties valued at less than HKD10 million (USD1.3 million) at 60 percent \u2014 a restriction that does not apply to developers and nonbanking institutions.<\/p>\n
More: Property developers in Indonesia celebrate relaxed mortgage rules
Buyers are being tempted by 120 percent mortgages Another day, another dollar. Image credit: Krystal...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-18956","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-4VK","jetpack-related-posts":[{"id":74528,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/explainer-what-hong-kongs-interest-rate-increase-means-for-hibor-prime-and-mortgages\/","url_meta":{"origin":18956,"position":0},"title":"Explainer: What Hong Kong\u2019s interest rate increase means for Hibor, prime and mortgages","date":"December 14, 2017","format":false,"excerpt":"\r Hong Kong Monetary Authority (HKMA), the city\u2019s de facto central bank, today raised its base lending rate for the third time this year following a similar move by the US Federal Reserve, increasing it by 25 basis points to 1.75 per cent. What is the base lending rate? It\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":97360,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/rise-in-big-mortgages-offered-by-hong-kong-developers-to-speed-up-sales-raises-default-fears\/","url_meta":{"origin":18956,"position":1},"title":"Rise in big mortgages offered by Hong Kong developers to speed up sales raises default fears","date":"September 6, 2018","format":false,"excerpt":"\r The number of Hong Kong developers providing mortgages for homebuyers hit a record in the second quarter of this year, raising concerns over a possible rise in defaults should an increase in interest rates and falling prices hurt sentiment in the world\u2019s most expensive property market. Builders offering financing\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":56066,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/standard-chartered-raises-mortgage-rate-citing-hkma-rule-changes\/","url_meta":{"origin":18956,"position":2},"title":"Standard Chartered raises mortgage rate, citing HKMA rule changes","date":"May 26, 2017","format":false,"excerpt":"\r Standard Chartered Bank has raised its residential mortgage rate in Hong Kong, and other banks are expected to follow suit. Standard Chartered cited the increased cost of doing business following the Hong Kong Monetary Authority\u2019s latest risk management measures as the reason. The bank will increase the interest rate\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8006,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/mainland-china-buyers-wooed-to-yuen-long-by-price-discounts-special-incentives-offered-by-hong-kong-developers\/","url_meta":{"origin":18956,"position":3},"title":"Mainland China buyers wooed to Yuen Long by price discounts, special incentives offered by Hong Kong developers","date":"March 15, 2016","format":false,"excerpt":"\r Steeper discounts and an array of tax incentives being offered by developers have drawn mainland buyers back to Hong Kong\u2019s western New Territories, as the price premium of Hong Kong over Shenzhen continues to narrow.\r \r Source : South China Morning Post\r Read more...Mainland China buyers wooed to Yuen\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":58006,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/why-should-you-care-about-interest-rates\/","url_meta":{"origin":18956,"position":4},"title":"Why should you care about interest rates","date":"June 15, 2017","format":false,"excerpt":"\r The Hong Kong Monetary Authority (HKMA) raised its base rate by 0.25 percentage points on Thursday following the US Federal Reserve\u2019s overnight move. In announcing the decision, HKMA chief executive Norman Chan Tak-lam reiterated his warning to Hong Kong home buyers that mortgage rates will rise in the near\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":56316,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/mortgage-rate-rise-viewed-as-a-one-off-by-the-market\/","url_meta":{"origin":18956,"position":5},"title":"Mortgage rate rise viewed as a one-off by the market","date":"May 30, 2017","format":false,"excerpt":"\r The decision by many of Hong Kong\u2019s largest banks to raise the interest rates they charge on mortgages last weekend is not expected to spark a trend towards further rate rises, market watchers have told South China Morning Post. \u201cThe rises were a response to regulatory tightening measures by\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/18956"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=18956"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/18956\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=18956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=18956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=18956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nUnder the government\u2019s Mortgage Insurance Programme, however, first-time buyers can take out mortgages of as much as 90 percent for homes valued less than HKD4 million (USD515,000).
\nRecent mortgage rates seem to overstep those limits. Last month, Cheung Kong Property started offering loans as high as 123 percent of home values in its Yuccie Square project in Yuen Long.
\nSimilarly, Sun Hung Kai Properties offered to lend as much as 120 percent of the value of units in its Park Yoho Venezia project, also in Yuen Long. Buyers, however, must have already bought a unit priced at 70 percent of the purchase value of a new unit.
\n\u201cProperty developers are very aggressive and trying to offload inventory because the outlook of the Hong Kong property market is not looking good,\u201d Australia & New Zealand Banking Group Ltd economist Raymond Yeung told Bloomberg.
\nSince prices reached peak levels in September, Hong Kong\u2019s residential market has suffered a property correction of 13 percent.
\nRead more: Hong Kong apartment claims \u2018most expensive\u2019 title in Asia
\n
\nSource : property-report.com
\nRead more…Are HK developers being too generous with mortgages?<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"