appConfigEntityId

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

hooksArticlePageAdvertisementConfigArticle

liveArticle

appConfig

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

sectionsV2

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

json

Salina Li

Hong Kong’s first mortgage policy relaxation in 14 years has yet to bring cheer to the city’s secondary housing market in the 10 days since its introduction on July 7, with a confidence index flattening and weekend sales at the 10 largest housing estates remaining in single digits for 15 consecutive weeks now.
Only five secondary market sales were recorded over the weekend, a decline of 44 per cent from the previous Saturday-Sunday period, according to Ricacorp Properties.
Meanwhile, the Midland Confidence Index, which reflects confidence among owners who have put their homes up for sale, stood unchanged week on week at 59.5 points on Monday.
Homeowners are taking a wait-and-see approach, said Buggle Lau, Midland Realty’s chief analyst.
Lukewarm home sales in Hong Kong signal buyer caution ahead of looming rate hike
“Mortgage easing is helpful, but will not have an immediate effect, as the housing market is still facing multiple headwinds, including interest rate hikes and short-term uncertainties,” Lau said.
The Hong Kong Monetary Authority (HKMA) earlier this month eased mortgage rules for the first time since 2009 to make borrowing easier for first-time homebuyers and those who want to upgrade to bigger homes.
Hong Kong’s home prices to decline further amid multiple headwinds: JLL
The move has piqued the interest of potential homebuyers and current owners, but will not make a big difference for the overall property market outlook, according to brokers and bankers.
Sentiment continues to be weak, as homebuyers are being cautious with interest rates expected to rise again.
“Homebuyers will not enter the market immediately, but will wait until the overall economy has stabilised and there are no further increases in interest rates,” Lau said, adding that the housing market will take time to digest the mortgage relaxation.
Hong Kong mortgage changes seen having limited impact on property market
Once weekly secondary volume consistently stays at low levels, it points to the beginning of a home price correction period, Citi said in a report published on Monday. This round of correction is expected to last at least until the end of 2023, “as we see overall demand as weaker than our already bearish assumptions”, the bank said.
“A much faster pace of US rate cuts would boost housing demand, but this is not Citi’s house view for 2024 Fed fund rate forecasts,” Citi added.
Although the US Federal Reserve suspended interest rate increases in June, it is likely to resume its campaign to control inflation this month. The HKMA also paused its rate hikes in June for the first time since March 2022, keeping Hong Kong’s base rate at 5.5 per cent after the Fed’s move to stagger potential further increases after 10 consecutive hikes.
Hong Kong home rents and leasing activity expected to rise in second half: Cushman
But Hong Kong’s mortgage rate has more than doubled to 3.5 per cent from 1.5 per cent before the rate-hike cycle. This means that a monthly mortgage payment for a HK$6 million (US$766,640) flat with a 90 per cent loan-to-value ratio spread over 30 years has surged by 30.1 per cent to HK$25,461, according to Midland Realty.
Moreover, homeowners are reluctant to cut their asking prices, agents said.
“There is a tug of war between buyers and sellers,” said Willy Liu, Ricacorp’s CEO. The rate of price adjustments by homeowners has not met buyers’ expectations, which has hindered secondary market transactions.
Property deal volumes, value decline in June amid higher borrowing costs
There has been no so-called chop in prices in the overall secondary market, unless some owners are waiting for money or emigrating in a short period of time, Midland’s Lau said. “That’s why the secondary market is so quiet, with only a few transactions over the weekend,” he added.
The Centa-City Leading Index, a gauge of lived-in home prices compiled by Centaline Property Agency, stood at 165.18 on Friday, down 0.3 per cent week on week and at a 10-week low.
Weakening secondary market sales have also been impacted by a glut of new homes in Hong Kong, which is also absorbing demand.
The number of unsold units in completed projects is currently at its highest since 2007. There are 83,000 housing units available in Hong Kong, with 18,000 in completed projects and the rest under construction. Additionally, about another 25,000 units are expected to hit the market in 2023, according to JLL.


Hong Kong Aberdeen marina project attracting local and overseas interest

Mainland China’s ultra-wealthy numbers rise as Hong Kong tipped for faster growth

Hong Kong’s education hub cannot be a one-market wonder

WeWork finds new lease of life in Hong Kong as global uncertainty drives demand

Hong Kong property

Hong Kong mortgage relaxation yet to lift secondary market out of interest rate hike gloom

Residential property advertisements in Mong Kok. Photo: Edmond So

Hong Kong’s home prices to decline further amid high mortgage rates, glut of new units, lack of mainland buyers: JLL

A smoggy view of Kowloon and the New Territories from ICC in West Kowloon, Hong Kong, on November 22, 2022. Photo: Xiaomei Chen

People check  residential property advertisements displayed in Mong Kok on July 7, 2023. Photo: Edmond So

Hong Kong mortgage changes attract interest, but property experts foresee limited impact on home prices, transactions

A man checks residential property advertisements displayed in Mong Kok on July 7, 2023. The government has eased mortgage rules for the first time since 2009. Photo: Edmond So

CEO of the Hong Kong Monetary Authority Eddie Yue Wai-man meets the media at HKMA in Central on July 1, 2023. Photo: Xiaomei Chen

Business

Property

Hong Kong & China

News

Hong Kong

Hong Kong Economy

Only five secondary market sales were recorded over Saturday and Sunday, a decline of 44 per cent from the previous weekend: Ricacorp Properties
‘Mortgage easing is helpful, but will not have an immediate effect,’ Midland Realty’s Buggle Lau says


Hong Kong’s first mortgage policy relaxation in 14 years has yet to bring cheer to the city’s secondary housing market in the 10 days since its introduction.
