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Hong Kong home buyers seeking highest mortgages since 2008

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Real estate agents wait for potential buyers outside the sales office of Park Yoho Venezia, a residential property developed by Sun Hung Kai Properties on June 25, 2016. Photo: Bloomberg

Hong Kong home buyers are seeking larger mortgages, with lending now at an eight-year high as home prices continue rising, according to the mReferral Mortgage Brokerage Services.

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The mortgage broker says 35.1 per cent of its clients are now opting to borrow between 70 and 90 per cent of their purchase value — the highest proportion since its started researching the market in January 2008.

“That reflects just how high home prices remain,” said Kostka Cheung, mReferral’s chief operating officer.

It measured mortgages being obtained through banks or finance companies, and not those provided by developers.

Cheung said most of the loans were being offered to first-time buyers for flats worth below HK$6 million.

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Under existing rules, first-time home buyers can receive a maximum 90 per cent loan-to-value, or LTV, through the Mortgage Insurance Programme for properties worth less than HK$4 million and an 80 per cent LTV for those worth up to HK$6 million.

The latest figures come as Hong Kong Monetary Authority last week expressed concern that aggressive mortgage lending by developers to boost sales could indirectly increase the potential credit risk faced by banks, with officials urging greater vigilance among lenders.

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