Mortgage approvals fall amid rate fears
Maria Chan and Peggy Sito
New housing loan approvals fell 9.1 per cent last month to $11.5 billion after jumping 63 per cent in March, as sales in the property market slowed on concerns of further interest rate increases.
Lenders said homebuyers would remain cautious because of the uncertain interest rate outlook and the slumping stock markets.
New mortgage approvals for primary market and secondary market transactions decreased by 17 per cent and 11.3 per cent, respectively, despite a 5.2 per cent increase in refinancing approvals last month, the Hong Kong Monetary Authority's latest figures showed.
Sunny Cheung Yiu-tong, director and head of consumer banking of DBS Bank (HK), said the increase in refinancing was largely prompted by mortgage rate cuts offered by lenders.
The number of discounted mortgages - offered at more than 2.5 percentage points below the prime rate - rose to 65.8 per cent of the 6,774 loans approved last month from 57.5 per cent in March.
'I think lenders will continue to offer short-term incentives to entice customers,' Mr Cheung said.
The latest special offer came from Cheung Kong (Holdings), which teamed with Standard Chartered Bank to launch a mortgage plan yesterday for buyers of the Metro Town development in Tseung Kwan O.
Cheung Kong is offering buyers a cash rebate equivalent to 1 per cent of the value of their properties.
However, Mr Cheung expected the property market would continue to slow down as interest rates might increase further next month and the stock market downturn had made homebuyers more cautious.
Peggy Tam Lai-king, head of secured lending at Hang Seng Bank, said homebuyers might take a 'wait and see' attitude after some property developers recently cut apartment prices.