Cheung Kong gives sentiment $500m lift

Richard Woo

Cheung Kong will make available up to HK$500 million worth of low-interest loans to buyers of Caribbean Coast in Tung Chung on Lantau Island in view of weak buying sentiment.

Caribbean Coast is expected to be the first big residential project to be put on sale following the terrorist attacks on the United States.

Cheung Kong executive director Justin Chiu Kwok-hung said the company aimed to launch the project next month and prospective buyers could apply for the subsidised loans until the end of the month.

The loan scheme follows a Government decision to offer subsidised loans to first-time home buyers and Home Ownership Scheme applicants. However, Cheung Kong's eligibility criteria and loan terms are more relaxed.

Cheung Kong would lend HK$600,000, or 25 per cent of the property prices, in the form of second mortgages to those with a family income of less than HK$60,000 per month and total assets of HK$1.5 million.

The loans should be repaid in 10 to 30 years.

Borrowers need not repay interest or principal for the first three years. The interest rate being charged will be 3 per cent less than prime for the following three years.

The Government's Home Starter Scheme is only on offer to families with incomes less than HK$50,000 a month and carries an interest rate of 2 per cent to 3.5 per cent.

Mr Chiu said the developer's scheme aimed to assist those whose monthly incomes were marginally above the limit under the Government loans.

He said the launch and price-setting of Caribbean Coast were not affected by the terrorist attacks on the US, adding that the market had stabilised and 'life still goes on'.

The banks' valuation of the project at HK$2,800 to HK$3,200 per square foot was also not affected by the US tragedy, he said.

Meanwhile, Mr Chiu said there was no need for the Government to delay the land auction on October 16, in which three sites would be offered.

Mr Chiu said he opposed any suspension of property sales and land sales because people needed to be informed of market direction and price level through actual transactions.

Among the three sites, one commercial lot in Hunghom was drawn from the reserve list and the Government has already secured an unknown developer's agreed price for the site, he said.