EditorialHong Kong mortgage moves call for prudent approach
- Relaxation of rules will make home decisions easier for some in city, one of the world’s most unaffordable property markets, but caution is required
The government has relaxed the loan ratios for mortgages for the first time in more than a decade. The goal is to make home purchases easier for first-time buyers.
A moderate measure that will also help those hoping for a home upgrade, it comes amid a downward property trend and a slower than expected economic recovery. It may pique the interest of potential buyers but is unlikely to make a big difference for the overall property market outlook; nor is it designed to do so.
There is, after all, a need to keep a necessary balance between market expectations and encouraging home ownership.
Under the revised mortgage rules, homes of up to HK$15 million (US$1.9 million) for owners’ own use can get up to 70 per cent mortgage financing; and those valued between HK$15 million and HK$30 million are entitled to 60 per cent loans. They are up from the previous limit of 50 per cent loan eligibility for flats costing HK$10 million or more.
The loan ratio for luxury homes with price tags of HK$30 million or more will remain unchanged at 50 per cent.