Hong Kong realtors unveil ‘zero down payment’ home lending scheme

Hong Kong's two largest property agencies, Midland Realty and Centaline Property Agency, are offering “zero down payment” schemes to existing home owners in a bid to drum up sales, a move that challenges the Hong Kong Monetary Authority tightening mortgage policy, which is intended to temper soaring property prices.

mReferral Mortgage Brokerage Services, a unit of Hong Kong-listed Midland Holdings, will lend up to 130 per cent of the value of a flat, up to a maximum of HK$20 million, through financial institutions from Tuesday.

“It should be a breakthrough in Hong Kong’s mortgage lending industry,” said Sharmaine Lau Yuen-yuen, mReferral’s chief economic analyst. "We are in talks with different developers to offer this scheme for their new projects.”

Ricacorp Properties estimated that new flat supply would climb to a 12-year high this year with a potential 33,891 units in the sales pipeline.

With ample new supply, developers face huge competition for buyers at a time of stricter mortgage policy, rising stamp duties and likely additional interest rate tightening.
Cheung Kong Property executive director Justin Chiu said it would offer an unprecedented home financing plan to push the sale of its soon-to-be launched luxury project, Crescendo, in Yuen Long.

The project, comprised of 67 villas with sizes ranging from 1,500 square feet to 2,400 sq ft, is targetted at upgraders.
mReferral’s scheme come hours after its rival Centaline Mortgage Broker announced a 120 per cent loan to value ,mortgage for its customers through the group’s finance unit.