Aspiring homeowners were not left out in the 2020-21 Budget, with a wide range of measures proposed to support the city’s runaway housing market, including the launch of a HK$1 billion (US$128 million) program for fixed-rate mortgage loans to help those aiming to buy an apartment in the world’s least affordable property market.
Financial Secretary Paul Chan Mo-po said in presenting his fourth budget on Wednesday the scheme will offer homebuyers more loan options and reduce the risks of interest-rate volatility.
Under the plan, Hong Kong Mortgage Corp will offer fixed-rate mortgage loans through banks, with interest rates of 2.75, 2.85 and 2.95 percent per annum for periods of 10, 15 and 20 years respectively
Under the plan, Hong Kong Mortgage Corp will offer fixed-rate mortgage loans through banks, with interest rates of 2.75, 2.85 and 2.95 percent per annum for periods of 10, 15 and 20 years respectively. The loan amount will be capped at HK$10 million.
Alva To Yu-hung, vice-president of Cushman & Wakefield, welcomed the offer of more loan options, saying it will support the property market in the near term.
However, he advised homebuyers to be careful as relaxing mortgage-loan plans may increase risks amid the current economic downturn.
Jitters over the novel coronavirus epidemic have brought Hong Kong’s property market to a halt as buyers stay away. According to Centaline Property Agency, only 13 apartments at the city’s 10 largest housing estates changed hands in the first three weeks after the Lunar New Year.
There have been calls for the government to ease implementing the stamp duty for homebuyers and the doubled ad valorem stamp duty, commonly known as two cooling measures.
But Chan said he believes it’s still not the right time to relax the government’s property cooling measures.
He said although the property market has seen a correction since the second half of last year, home prices remain out of reach for most residents in terms of economic fundamentals and affordability.
A government source said property transaction volumes have fallen, but prices had not dropped much in January and February. Last year, local property home prices rose about 5 percent.
The source said the property market is quite sensitive to cooling measures, and it will take more time to watch the market and the economic situation. At present, there’s still no need to withdraw or ease the cooling measures.
Cushman & Wakefield’s To said the housing market might fluctuate and gain momentum if the cooling measures are withdrawn, which will have an impact on the healthy growth of the market.
He urged the government to consider waiving the special stamp duty to help homeowners who are in financial trouble to sell their apartments, and this could improve liquidity in the secondary market.
On housing supply, Chan said a total of 100,400 public housing apartments would be completed during the five-year period from 2019-20 to 2023-24, with 74,400 public rental housing and Green Form Subsidized Home Ownership Scheme units, as well as about 26,000 other subsidized sale units, for sale.
In the private sector, an estimated 19,600 residential flats would be completed annually from 2020 to 2024 — up 25 percent over the annual average in the past five years.
