Sino Land rolls out homebuyer incentives package, including low mortgage lending rates, for Grand Central project
- Hong Kong property developers are beginning to roll out incentives to help shield homebuyers from the latest borrowing costs
- Sino Land has an incentive package on offer at Grand Central in Kwun Tong, including a mortgage rate as low as 2.375 per cent
Hong Kong property developers are beginning to roll out incentives to help shield homebuyers from the latest borrowing costs, after the Hong Kong Monetary Authority nudged up the base lending rate by a quarter-point on Thursday, matching the December rate decision by the US central bank on Wednesday.
Sino Land became among the first to unveil a package of buyer incentives on Thursday afternoon, including a mortgage rate from as low as 2.375 per cent in conjunction with Bank of East Asia, in addition to a cash rebate and HK$4,000 (US$510.97) in free credit.
“I believe that the HKMA’s move will have minimal impact on a premium property like Grand Central, given the good performance in sales to date,” said Raymond Ng Kai-man, deputy director of the personal banking division of Bank of East Asia.
Sino Land sold 383 flats at Grand Central on Tuesday, after 5,000 potential buyers had registered for the sale, which began last week.
Nevertheless, analysts said cheaper mortgages do not necessarily serve as a huge draw for buyers.
“Buyers’ sentiment to purchase is more heavily dependent on the actual price point of properties, the overall market outlook and the prospects of the US-China trade war,” said Thomas Lam, executive director, head of valuation and advisory at Knight Frank.
He pointed out that the market will remain quiet from now until the Lunar New Year, especially for second-hand properties. “The first-hand property market, on the other hand, will be relatively active. In order to appeal to these buyers, developers should focus on offering an attractive price point.”
Lam also advises developers to provide diversified offers to appeal to different types of buyers.
Looking ahead, the pace of interest rate increases is expected to slow next year.
“While there will be uncertainty in the market in 2019 as a result of the possible slowdown of the global economy and the US-China trade war situation, inflation will remain low next year,” says Ivy Wong Mei-fung, managing director of Centaline Mortgage Broker.
The decision by the HKMA to raise the city’s base lending rate in lock step with the US Federal Reserve’s quarter-point tightening has triggered concerns over the impact to the property market in Hong Kong.
It is not clear that the higher rate will have a dampening effect, according to analysts, who noted that local banks may choose not to follow the HKMA’s decision.
The city’s largest banks, HSBC, BOC Hong Kong and Standard Chartered left their prime lending rates unchanged on Thursday.
Grand Central released an additional 130 units on Wednesday evening, adding to 338 units offered for sale on Sunday.
Prices begin at around HK$7.3 million for a unit with a saleable area of 380 square feet, and range up to HK$18.5 million for a three-bedroom unit.