Property big guns step up mortgage price war
SHKP, Cheung Kong and Wheelock offer financing schemes with lower rates
More developers and banks have joined the mortgage price war, with Sun Hung Kai Properties, Wheelock Properties and Cheung Kong (Holdings) all offering financing packages with lower rates to boost buying interest.
Sun Hung Kai Properties is selling its remaining flats at 18 Farm Road, a luxury residential project in To Kwa Wan, with a new mortgage package from Bank of East Asia that cuts the bank's housing loan rate to three percentage points below the prime rate.
A second mortgage financing scheme will be offered, which will allow buyers to defer the principal payment for the first two years with the developer subsidising the interest cost.
'We believe about 70 per cent of buyers are end-users this year, which is a significant growth on last year,' said Eric Chow Kwok-yin, an executive director of Sun Hung Kai Real Estate Agency.
'To boost buying interest, we are negotiating with banks to offer new mortgage financing schemes for our projects.'
The Lands Department yesterday approved the sale of the Apex, Cheung Kong's new residential project in Kwai Chung industrial district. The developer will be ready to sell the flats next week.
Sales manager Warren Leung Cheuk-hang said more than 10 banks would offer mortgage financing schemes.
Wheelock has offered a mortgage financing scheme for buyers at 60 Victoria Road, a residential project in Kennedy Town. The mortgage rate is prime rate minus five percentage points for the first three years. The company announced a new mortgage financing scheme with Hang Seng Bank yesterday, which is offering a rate of prime minus 2.5 percentage points.
Meanwhile, He Guangbei, the vice-chairman and chief executive of Bank of China (HK), said the bank would monitor the market closely and adjust its mortgage strategy when needed.
The bank's lending rates for home loans stand at two to 2.5 percentage points below prime, with its fixed-rate mortgage at 5 per cent for the first six months.
Mr He said changes in the mortgage rate reflected supply and demand in the market.
'Mortgage loans have slowed since the second half of last year due to mortgage prices and the rise in mortgage rates,' he said. 'Competition has intensified recently because of the softening of interbank rates, so the decline in mortgage rates is a reflection of changes in the market.'
Lower costs
Bank of East Asia cuts rates for buyers at SHKP's 18 Farm Road
More than 10 banks line up behind Cheung Kong's Apex
Wheelock offers financing at five percentage points below prime
