Mortgage broker mReferral has joined in the chorus of those who are predicting rising mortgage rates in Hong Kong next year, forecasting that they could well climb to nearly 4 per cent.
'Local mortgage rates are bound to rise further in 2012 despite six increases this year,' said Sharmaine Lau, chief economic analyst at mReferral Mortgage Services. 'Banks have to adjust their mortgage rates in response to changes in funding costs.'
She believes effective mortgage rates might rise a further 150 basis points in the next 12 months.
The M-rate, the effective rate of approved mortgage transactions arranged by mReferral, now stands at 2.44 per cent and Lau expects it will pass 3 per cent next year.
'Whether or not it will surge to 4 per cent will be subject to the global economic environment and capital outflow conditions,' she said.
It would bring the rate back to the normal level, as the average mortgage rate in the past 20 years had ranged between 3 and 4 per cent, she said.