Sun Hung Kai Properties calls for relaxed mortgage lending for mass market flats
Hong Kong’s financial secretary has indicated on Monday that the government was considering relaxing its mortgage tightening policy
Sun Hung Kai Properties, Hong Kong’s largest developer by market value, has called on the Hong Kong Mortgage Corporation to ease its lending scheme for mass market flats, two days after the city’s financial secretary indicated that a relaxation was being considered by the government.
Executive director Adam Kwok Kai-fai criticised the existing mortgage insurance scheme, which provided a maximum loan-to-value ratio of 90 per cent for homes costing HK$4 million (US$511,330) or less, as “outdated”.
“New flats costing HK$4 million each is close to extinction in Hong Kong. Flats with an area of 300 to 400 square feet have exceeded this budget," he said on Wednesday.
Instead, Kwok, the son of jailed and former co-chairman Thomas Kwok Ping-kwong, said the HKMC should raise the price cap to HK$6 million.
With Hong Kong home prices having risen 13 per cent to an average of HK$12,147 per sq ft last month, according to Midland Realty data, it means that buyers who want to apply for a 90 per cent loan-to-value mortgage could only do so for flats of no more than 329 sq ft.
New flats costing HK$4 million each is close to extinction in Hong Kong. Flats with an area of 300 to 400 square feet have exceeded this budget
To drum up sales, Hong Kong developers have been providing first mortgage loans of 80 to 90 per cent of a flat’s value.