Property developers in Hong Kong are offering creative financing schemes to move units.
In a bid to attract buyers, Sun Hung Kai Properties, Hong Kong’s biggest developer by market value, is offering mortgages of as much as 120 percent of a unit’s value at one of its projects, reported Bloomberg.
However, buyers of units at the Park Yoho Venezia must own another property within the city’s Yuen Long district, which will be pledged as security.
The South China Morning Post earlier reported that a Sun Hung Kai spokesman had confirmed the offer.
The financing scheme aims to attract buyers in a market that has witnessed a price correction of more than 13 percent since property prices peaked in September 2015.
Housing prices in Hong Kong soared by 370 percent from their 2003 level to the September peak before the start of a correction, spurred by a slowdown in China and a growing housing supply.
Sun Hung Kai’s financing scheme is also meant to circumvent the government’s cooling measures, which limits traditional bank loans on properties priced below HK$10 million (S$1.74 million) to 60 percent of the unit’s value.
“Overall, property developers are very aggressive and (are) trying to offload inventory because the outlook of the Hong Kong property market is not looking good,” said Australia & New Zealand Banking Group senior economist Raymond Yeung.
This year, ratings agency S&P expects average home prices in Hong Kong to drop by 10 to 15 percent. However, it believes the industry can withstand much worse.
Property companies in Hong Kong have been less active in buying government land this year as they struggle to move existing units and dangle discounts to lure buyers.
While it is not alone, Sun Hung Kai’s offer is among the most generous so far.
Last year, Kowloon Development, Cheung Kong Property Holdings and Henderson Land Development began offering financing of up to 90 percent as home prices started to decline.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
