The number of flat sales is expected to fall dramatically as banks tighten lending on both mass and luxury properties, with agents saying buyers are not being loaned more than 70 per cent of a home's value.
From this month, HSBC has been applying the 70 per cent rule to buyers of properties worth HK$20 million or more. But the bank said this would not apply to mass housing. Bank of China (HK) said its mortgage lending policy had not changed.
However, property agents said most banks had been tightening lending on everything from luxury to mass housing flats.
Cookie Wong Wing-yan, associate director of Ricacorp Mortgage Agency, said: 'They have not publicly announced it, but our experience is when our colleagues called various banks in different districts asking for more than a 70 per cent mortgage for our customers, their frontline staff's reply was negative.
'Faced with the unclear outlook for the housing market, banks prefer not to lend more than 70 per cent.'
Ms Wong said banks did not want to see their customers turn into negative equity owners - in which the value of their mortgage exceeds that of their home - which could lead to a rise in mortgage defaults.
