First-time homebuyers in Hong Kong unlikely to get any help from government as Chief Executive Carrie Lam says no plans to increase mortgages
- City’s leader says issue of property prices will be handled with ‘extreme prudence’
Hong Kong’s leader has made it clear her government has no immediate plans to ease the loan-to-value ratio requirement on residential mortgages, and the issue will be handled with “extreme prudence”.
Chief Executive Carrie Lam Cheng Yuet-ngor’s clarification on Tuesday was in response to speculation that such a move could be imminent after Financial Secretary Paul Chan Mo-po earlier hinted the government was considering relaxing such rates for mortgages to help first-time homebuyers.
Lam said the cost of property in the city had seen a significant increase since she took office in July 2017, even taking into account the 7.2 per cent drop between August and November last year.
Reiterating that the government would not scrap or reduce the various tax-related property cooling measures, Lam said many had suggested taking care of those who could afford the loan, but not the high down payments.
However, she said any relaxation of the mortgage requirements could mean heavier burdens on loans for homebuyers, and more importantly, any issue of such signals would affect what is considered a sensitive market.
“It is not ideal if the citizens think the government is worried about the adjustment of the property market, and probably would take some measures,” she said. “The government has no immediate plans on the issue, and will be extremely prudent in moving any current measures.”
The current maximum loan-to-value ratio is 50 per cent for homes valued above HK$10 million, while homebuyers can only borrow 60 per cent of the property value from banks for homes valued at less than HK$7 million.
On December 31, the government-appointed task force unveiled its long-awaited recommendations on ramping up land supply in space-starved Hong Kong, citing “considerable” public support for options such as massive reclamation, using part of the Fanling golf course for building homes, and a public-private partnership to repurpose some 1,000 hectares of farmland owned by big developers.
The government has been accused of ignoring the work of Stanley Wong Yuen-fai, the chairman of the task force, in the same way it dealt with Professor Nelson Chow Wing-sun’s study on a universal pension system for the city in 2014.
Addressing such criticism, Lam said: “It would probably be irresponsible for us to fully accept suggestions raised by external consultants every time, whether it is paid ones like the last time on universal pensions, or those done on a voluntary basis.”
Most principles laid out in the report aligned with the government, especially on the usage of brownfield sites, and support for reclamation, she said.
But, she noted the controversial issue of private recreational leases – such as that of the Fanling golf course – had yet to be handled, having been the subject of another extensive consultation conducted by the Home Affairs Bureau.
“It would be unfair for me, or the secretary for development, to jump to conclusions on the whole subject of private recreational leases without taking into account that consultation,” Lam said. “I really hope to steer people away from just focusing on one lease, that is the Fanling golf course.”