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Thousands of Hongkongers face home financing crunch as flat delivery increases and banks tighten loan scrutiny amid economic slump
- More than 11,000 units in 17 residential projects are due for handover in the second half this year, almost double the volume in the preceding six months
- Several lenders have also raised their lending rates twice in the past six months, according to Eric Tso of mReferral Mortgage Brokerage
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Thousands of Hong Kong homebuyers are facing the risk of being shut out of bank financing for flats bought two years ago on a staggered payment plan, as banks have started to tighten lending criteria amid an economic slump.
More than 11,000 units in 17 residential projects are due to take delivery in the second half this year, almost double the volume in the preceding six months, according to government statistics and data compiled by Midland Realty.
They will come up against possibly stricter assessments by lenders, especially since the city’s worst economic crisis in decades – fuelled by protests and coronavirus pandemic – has eroded the purchasing power of many residents in several troubled industries, such as aviation, food and beverage and tourism.
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“Some may further tighten the assessment of repayment ability for applicants in view of the third wave of Covid-19 pandemic,” said Eric Tso, chief vice-president at mReferral Mortgage Brokerage Services. “Several lenders have also raised their lending rates twice in the past six months.”
The rate on mortgages linked to the Hong Kong Interbank Offered Rates (Hibor) has risen by 20 basis points to 1.5 percentage points above Hibor this year, he added. Some lenders have even raised the bar to 1.6 percentage points above the benchmark.
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