Hong Kong property: mortgage loans for homes under construction fall to lowest in 17 years as rising interest rates stifle transactions

Name: Hong Kong has until 2049 to fix its housing crisis, but is it possible?
Uploaded: 2023-08-02T00:30:19.000Z
Duration: 10 min 8 s
Description: Hong Kong has until 2049 to fix its housing crisis, but is it possible?

Loans for completed units are at a three-year low, according to data from mortgage broker mReferral

Overall property transactions in July dropped 7.6 per cent to 4,777 cases, according to Midland Realty data

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Mortgages approved for properties under construction year to date have fallen to the lowest in 17 years. Photo: Edmond So

Enoch Yiu

Published: 8:30am, 2 Aug 2023

The number of new mortgage loans on residential properties in Hong Kong has dropped dramatically this year, new figures show, as rising interest rates and economic uncertainty stifle the property market.

Mortgages approved for properties under construction year to date have fallen to the lowest in 17 years, while loans for completed units have dropped to a three-year low, according to data released by local mortgage broker mReferral on Tuesday.

“Overall, we have seen property transactions fall substantially this year, which has led to a sharp fall in mortgage loans,” said Eric Tso Tak-ming, chief vice-president at mReferral.

The total number of property transactions – including new and second-hand homes, commercial buildings and car parks – dropped for a fourth consecutive month in July, declining by 7.6 per cent from June to 4,777, according to a report released by property agency Midland Realty on Tuesday. That is the lowest figure in seven months.

The overall transaction value in July stood at HK$32.87 billion (US$4.2 billion), a sharp fall of 17 per cent from June and the lowest in six months.

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Hong Kong has until 2049 to fix its housing crisis, but is it possible?

Just 930 cases mortgages on properties under construction were approved in the first seven months of 2023, down 67.4 per cent from a year earlier, and the lowest since 2006, the mReferral data showed.