Mortgages in Hong Kong to drop this year, says consultant
Loans are expected to fall significantly in line with a decline in the number of property sales
The number of mortgages in Hong Kong will drop significantly this year following the Hong Kong Monetary Authority's (HKMA) further tightening of home lending, according to mortgage consulting firm mReferral.
"Property sales are likely to drop and that will affect mortgage activity in the fourth quarter," said Sharmaine Lau, chief economic analyst at mReferral Mortgage Services.
Lau expects new mortgages to drop about 25 per cent to HK$171.3 billion, the lowest level since 2007, according to mReferral.
Hong Kong's de facto central bank last week announced measures to make it harder to get a mortgage for a second home.
The announcement by Norman Chan Tak-lam, chief executive of the HKMA, came on the heels of the US Federal Reserve's unveiling of a third round of quantitative easing measures to provide liquidity and keep US interest rates low until 2015.
Under the new measures, borrowers who already have more than one mortgage can borrow a total of up to only 40 per cent of their monthly income, down from the typical 50 per cent.
Property buyers from outside Hong Kong with more than one mortgage are now subject to a lower loan-to-property value ratio ceiling.