Hong Kong home sales surge to six-month high as banks seen facing longer time to approve mortgage financing

Sales of lived-in homes rose more than threefold over the weekend in reaction to easier mortgage financing limits

Brokers expect a rush in financing applications, slower approval process as banks caught off guard

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Aerial drone view of Whampoa Garden residential blocks. Photo: Roy Issa

Published: 2:36pm, 21 Oct 2019Updated: 12:00am, 22 Oct 2019

Sales of Hong Kong’s lived-in homes jumped by more than threefold over the weekend after the government last week raised the mortgage entitlements for borrowers, catching banks off guard with a sudden flurry of financing applications, brokers said.

Twenty used homes changed hands at 10 housing estates in the city over the weekend, according to data by Centaline Property Agency, a six-month high. The surprise gain prompted brokers to advise buyers to allow an extra 30 days to two months for their paperwork to be approved.

“To play it safe, homebuyers better ask for three months to complete their home purchases of the flats,” said Raymond Chong, managing director of StarPro Agency, a mortgage broker in Hong Kong.

The flurry of activity in the middle of a downturn in Hong Kong’s housing market followed last week’s surprise announcement by the city’s Chief Executive Carrie Lam Cheng Yuet-ngor to raise the mortgage cap to 90 per cent, from 60 per cent, for homes valued at HK$8 million (US$1 million). The loans cap for borrowers eligible for 80 per cent loan financing – from 50 per cent – was raised to HK$10 million.

Chief Executive Carrie Lam Cheng Yuet-ngor is set to raise the mortgage cap to 90 per cent, from 60 per cent, for homes valued at HK$8 million (US$1 million). Photo: May Tse

Homebuyers should expect to take up to three months to complete their home purchases, instead of the usual two months, Chong said.

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