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Cheryl Arcibal

Enoch Yiu

Yulu Ao

Hong Kong has taken steps to revive the city’s property market by easing mortgage financing rules to pre-2009 levels, after a policy tweak in February produced only a short-lived burst.
Homebuyers will be able to obtain as much as 70 per cent financing effective immediately, regardless of the value or use of property, the Hong Kong Monetary Authority (HKMA) said in a statement. The debt-servicing ratio has been raised to 50 per cent from 40 per cent, standardising the level for both residential and non-residential properties, it added.
Developers and property agents welcomed the news, which they said would boost transactions and arrest the decline in prices.
Homes valued at more than HK$30 million (US$3.8 million) will be entitled to 70 per cent mortgage financing, compared with 50 per cent to 60 per cent previously, HKMA said. Chief Executive John Lee Ka-chiu earlier announced the initiative in his policy address.
HKMA CEO Eddie Yue Wai-man said the changes were made based on the current condition of the property market. The revision also meant that mortgage policies have been rolled back to what they were before 2009, when borrowing costs hit all-time lows after the global financial crisis.

“Even with these adjustments announced today, the Hong Kong banking sector has ample buffers to cope with any challenges from a sharp correction in property prices,” Yue said in the statement.
The latest move added to the HKMA’s decision in February to scrap most of the tightening measures it imposed since 2009 to tame what later became Hong Kong’s longest property market bull run on record through 2021. After a spike in transaction volume through June, demand and home prices weakened last quarter.
Residential property prices declined by 6.2 per cent in the first eight months of 2024, with a cumulative correction of 26.6 per cent from their peak in 2021, HKMA said. During the same period, the prices of offices, factories and retail premises eased by 17.5 per cent, 11.8 per cent and 13 per cent, respectively.
“The external environment is still facing uncertainties including the pace of US interest rate cuts,” it added.


The increase in mortgage financing will also be available for commercial properties. For rental properties, the maximum loan-to-value ratio will be increased to 70 per cent from 60 per cent.
For mortgage loans assessed based on the net worth of applicants, the loan ratio will be adjusted to 70 per cent from 60 per cent. It will cover offices, retail shops and industrial buildings as well.
“The latest property market measures are likely to create positive momentum,” said Luanne Lim, CEO of HSBC Hong Kong. “We remain committed to supporting customers’ mortgage needs while ensuring prudent risk management.”
The revised mortgage policy and rules allowing investment migrant scheme applicants to invest in residential property over HK$50 million should boost property deals, according to Eric Tso Tak-ming, chief vice-president of mortgage broker mReferral.
“It will also help attract more wealthy individuals to consider moving to Hong Kong,” Tso said, noting that about 2 per cent of residential property on sale is currently priced at more than HK$50 million.


Residential property between HK$15 million and HK$30 million will see more transactions, said Martin Wong, senior director and head of research and consultancy for Greater China at Knight Frank.
Developers have a swollen inventory, estimated at 20,000 units with another 25,000 units of new supply coming next year, according to CBRE Hong Kong.
Home prices could stabilise as more homebuyers enter the market, said Hannah Jeong, head of valuation and advisory services at CBRE Hong Kong.
“Given further rate cut expectations and attractive incentives from developers, homebuyers will be keen to look for opportunities to upgrade,” she said.
The luxury market is particularly primed to benefit from the easing, according to Midland Realty.
Sales of homes worth more than HK$50 million are projected to hit a three-year high of 600 units in 2024, said Sammy Po Siu-ming, CEO of Midland Realty’s residential division.
Given recent developments that are driving investor enthusiasm, Po said new home sales are likely to reach 5,000 in the fourth quarter, the most since the second quarter of 2019 when deals hit 5,905. Transactions on the secondary market are likely to top 10,000 units, a quarter-on-quarter increase of 20 per cent.
“Property prices are expected to rebound by about 3 per cent in the fourth quarter, with the annual decline narrowing to under 5 per cent,” he said.
Secondary home prices in August sank by 1.72 per cent month on month, the fourth straight monthly decline and the lowest since August 2016, according to official data. Lived-in home prices have dropped by 13.32 per cent year on year and 6.2 per cent since the end of 2023.
Apart from a boost to the upscale property segment, the HKMA’s relaxed mortgage policy will also “provide greater liquidity for end users and investors alike, contributing to the overall recovery of the market”, said Dorothy Chow, head of valuation and advisory services at Colliers.
Second-home sales and investor demand are likely to benefit the most from the HKMA’s policy relaxation, according to Joseph Tsang, chairman of JLL in Hong Kong.
“It increases buyers’ purchasing power despite stagnant wage growth,” he said.
Meanwhile, in response to the policy address, Wheelock Properties plans to speed up the launch of new projects, including phase one of the Double Coast development in Kai Tak, according to Ricky Wong Kwong-yiu, vice-chairman and managing director.


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HKMA allows buyers to borrow up to 70% of a property’s value, with the aim of reviving the market where prices have declined by 6.2% in the year’s first eight months


HKMA allows buyers to borrow up to 70% of a property’s value, with the aim of reviving the market where prices have declined by 6.2% in the year’s first eight months.
