Hong Kong may relax mortgage loan-to-value ratios amid sluggish property market: Financial Secretary Paul Chan

The government, along with the Hong Kong Monetary Authority, will balance financial stability and the interests of first-time buyers, Paul Chan says

Chan’s comments come as Hong Kong’s residential market is showing fresh signs of weakness after a short-lived rebound in the first quarter

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A night view of Kowloon taken from sky100 Hong Kong Observation Deck in West Kowloon, Hong Kong, on May 22, 2023. Photo: May Tse

Published: 3:39pm, 25 Jun 2023

Hong Kong’s government is considering marginally relaxing mortgage loan-to-value ratios for some residential property purchases, the city’s finance chief said.

The government is working with the Hong Kong Monetary Authority and will carefully deliberate to balance financial stability and the interests of first-time homebuyers, Financial Secretary Paul Chan Ma-po said on a Commercial Radio programme.

The city last year raised a cap for first-time buyers to acquire a property with a 10 per cent down payment to HK$10 million (US$1.3 million) from HK$8 million. Some homeowners called for the government to assist with purchasing bigger flats after they start families, Chan said.

Chan also cautioned residents against a high-interest rate environment amid market expectations that the US Federal Reserve will hike rates once or twice in the second half of this year. Hong Kong interest rates move in lockstep with the US as the local currency is pegged to the US dollar.

Henley Park, a residential development in Kai Tak. Photo: Handout

Earlier this month, Chan told lawmakers he would consider further relaxing the loan-to-value ratio for first-time homebuyers but rejected proposals to ease property cooling measures, including adjusting stamp duties.