New home loan applications in Hong Kong dropped 30.3 percent to 11,913 in June, as the government’s cooling measures took effect.
According to the Hong Kong Monetary Authority (HKMA), the total amount of new home loans approved dropped 16 percent to HK$26.6 billion in June. Of the mortgages approved, 79.9 percent were based on the Hong Kong interbank offered rate and 19 percent were prime-based.
“The numbers show the curbs, along with the rising mortgage rates, are making it more difficult for some potential buyers,” said Sharmaine Lau Yuen-yuen, Chief Economic Analyst at mReferral Brokerage Services.
“To increase their affordability, some buyers are even extending their loan period to as long as 24 years.”
Justin Chiu Kwok-hung, Executive Director at Cheung Kong (Holdings), also said that “home prices in the city are still vulnerable to the uncertainties in debt issues in the West.”
“I would not worry about hot money coming from the possible implementation of a third round of quantitative easing in the United States, as government measures have already made the local property market less favourable to investors,” he said.
Meanwhile, around 9.6 percent of total property sales in Hong Kong in the first half of 2011 was accounted for by mainland buyers, according to Centaline Property Agency.
“This reflects that more hot money is coming from the mainland as Beijing puts more tightening measures on its own property market,” said Wong Leung-Sing, Research Director at Centaline.
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