Hong Kong’s relaxation of residential mortgage rules may do little to spur demand from homebuyers who remain deterred by surging interest rates, according to analysts.
In the first major easing since 2009, the government on Friday increased the loan-to-value ratio for some homes, allowing buyers to snap up properties with a smaller down payment. The real estate industry has been under pressure from rising rates and a weak economy, with home prices falling 13% from their peak in 2021, according to the central bank.
Hong Kong’s base rate has climbed in line with the US Federal Reserve’s hikes since 2022 as the local currency is pegged to the greenback. The Hong Kong Monetary Authority has consistently cautioned homebuyers of higher borrowing costs, with the Fed likely to continue raising rates this year, including once later this month.
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