Hongkongers will feel the squeeze as mortgage rates gain momentum
Homeowners in Hong Kong, who use 60 per cent of their monthly income towards mortgage repayments, will see that figure rise to 70 per cent by the end of the year as banks raise their lending rates to match the Fed rates
The monthly mortgage repayment of homeowners in Hong Kong is expected to rise to 70 per cent of their monthly income by the end of this year – the highest level in nearly two decades – as mortgage rates kick upwards and home prices show no signs of abating, according to mReferral Mortgage Brokerage Services.
At present, the affordability ratio – monthly mortgage instalment to median salary income of families living in private flats – was 60 per cent, indicating that Hong Kong home prices were hardly affordable, said Sharmaine Lau Yuen-yuen, chief marketing officer at mReferral Mortgage Brokerage Services.
“As salaries are not likely to keep up with the growth in housing prices, the ratio could even approach 70 per cent by the end of the year,” she said.
The last time the ratio reached 70 per cent was back in July 1998.
Lau said that the price-to-income ratio, which is a good measure for buyers, showed that housing affordability had reached “alarming” levels for those trying to climb on the property ladder.