Hong Kong home mortgages expected to drop to four-year low in 2020
- Home loans are expected to drop to HK$290 billion - HK$296 billion from HK$341 billion last year, according to estimates
- Investment appetite has been sapped by an uncertain market outlook, mortgage referral firm Starpro Agency’s Raymond Chong says
The amount of home loans extended to buyers in Hong Kong is expected to drop to a four-year low this year, as a result of the Covid-19 induced economic recession, which has hit investment demand hard and stalled home sales.
Home loans are expected to drop to HK$290 billion (US$37.4 billion), according to an estimate by Mreferral Mortgage Brokerage Services, and HK$296 billion, according to Centaline Mortgage Broker, from HK$341 billion last year. The total amount of home loans stood at HK$217.4 billion in 2016.
In October itself, the number of mortgage applications decreased month on month by 11.2 per cent to 10,908 cases, while the value of mortgages approved decreased by 6.7 per cent compared with September to HK$34.6 billion. The value of approved mortgages fell for a fourth consecutive month in October, according to the latest data from the Hong Kong Monetary Authority.
“The slack in demand for home loans is largely due to a sharp fall in mortgage refinancing, and fewer new project launches this year,” said Ivy Wong, the managing director of Centaline.
In the first 10 months of this year, refinancing fell to 19 per cent of all mortgages approved from 35 per cent for the full year of 2019, HKMA data shows.