Mortgage rule changes to ease price of homes
HKMA action may affect younger buyers and investors seeking a second flat, say analysts
The Hong Kong Monetary Authority's tightening of requirements for a second mortgage will discourage investors and slow down the growth in home prices, property agents and analysts say.
Patrick Chow, head of research at Ricacorp Properties, said the measures could deter investors who rely on bank loans.
"We see increasingly cases of several people joining together to invest in mass homes, which involve a smaller lump sum payment. More difficulty securing mortgage loans will drive them away from the investment market," he said.
Chow said sales at popular housing estates such as Taikoo Shing and Nan Fung Sun Chuen in Quarry Bay would drop, and prices would follow.
Standard Chartered analyst Kelvin Lau said in a research note that as borrowing costs rise for buyers with multiple mortgages and for investors from outside Hong Kong, the immediate impact would be fewer home sales.
Younger homebuyers with limited capital who planned to take out loans of a longer duration may also be discouraged.