Buyers shrug aside rising mortgages as thousands throng sales offices to snap up homes

Thousands of buyers formed long queues to snap up units of K & K Property’s Victoria Skye at Kai Tak, and of Cheung Kong’s Ocean Pride in Tsuen Wan.

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People queue up outside the property sales office of K & K Property’s Victoria Skye apartments, shrugging aside the announcements by four of Hong Kong’s largest banks that mortgage rates would be increased. Photo: Edward Wong

Published: 6:45pm, 27 May 2017Updated: 8:25am, 13 Jul 2017

Thousands of homebuyers shrugged off rising mortgage rates and joined long queues at the offices of some of Hong Kong’s biggest developers hoping to snap up newly released flats.

As many as 4,800 buyers registered to bid for 307 flats at K & K Property’s Victoria Skye project, which is located at the former airport site of Kai Tak. One buyer, who wasn’t identified, walked away with four flats for a total of HK$30 million (US$3.85 million), agents said.

“Sales had been impressive,” said Midland Realty’s chief residential executive Sammy Po.

“The most recent tightening bodes well for developers as they can use their own mortgage schemes with preferential rates to entice buyers.”

Hong Kong’s monetary authority tightened mortgage lending rules two weeks ago, implementing measures aimed at stopping the city’s runaway real estate prices, which surpassed the industry’s last recorded peak in 2015.

People queue up outside the property sales office of Victoria Skye. Photo: Edward Wong

Under the tighter rules, loans for properties valued at less than HK$10 million are limited to 50 per cent of the total price for borrowers with outstanding mortgages, and 40 per cent for those exceeding HK$10 million.

Following the move, four of Hong Kong’s biggest banks raised their mortgage rates by 10 basis points to 1.4 percentage points above the city’s interbank offered rate, or Hibor.