Govt To Raise Mortgage Cap For Homebuyers

Financial Secretary Paul Chan on Wednesday announced the government will make it easier for property buyers to obtain mortgages for pricier flats – enabling first-time buyers to take out a 90-percent loan for flats worth up to HK$10 million in future – HK$2 million more than at present.

Announcing the initiative in his latest budget, Chan noted that the government had last amended the Mortgage Insurance Programme (MIP) in 2019 without affecting the stability of the property market, and will do so again due to the “the current market situation, the supply in the next few years and the need to provide assistance for the first time home buyers and families seeking self occupied ‘flat for flat’."

Under the programme, buyers can take out mortgage loans of over 60 percent of the value of the purchased flats, with the Hong Kong Mortgage Corporation (HKMC) providing insurance cover for banks.

Chan said successful applicants can in future get loans covering 80 percent of the flat’s value for apartments priced up to HK$12 million – up from the current HK$10 million limit.

First time home buyers can get a 90-percent loan for properties worth up to HK$10 million, compared with the current HK$8 million.

"I think this is much welcomed by the property sector and also by the home buyers," said Shih Wing-ching, the founder of Centaline property agency. "It will make the property more available to home buyers who are not too rich."

Speaking at a press conference afterwards, Chan said he doesn't think the latest announcement will push up home prices.

With an increase in the supply of units and a possible interest rate hike in the future, he said people will adopt a more cautious approach when deciding whether or not to buy flats.

“We don’t think people will be rushing to buy a property. So even if we are to have the relaxation, those who have a genuine demand will be given an extra choice. But I don’t think this [measure] will have a stimulating effect and it will not give rise to heated speculation,” the minister said.

“In other words, we have a stable environment; we try as much as possible to have relaxation when circumstances permit so that end-users can buy a property.”

However, Chan stressed there are no plans to relax any other property demand management measures.

Meanwhile, the finance chief also said the government is working to free up more land for housing, saying enough land for around 20,000 flats has been made available in the current financial year – 7,000 more than the original target.

For the coming financial year, Chan said 13 residential sites and four commercial ones will be sold off under the Land Sale Programme, that can create 8,000 residential units and 300,000 square metres of commercial floor area.

Together with railway property development and new flats from private developers and the Urban Renewal Authority, Chan, said the potential land supply for the whole year is expected to reach around 18,000 new flats.

As for the government’s initiative to build a massive new Northern Metropolis by the mainland border, Chan said he’ll set aside HK$100 billion from the returns of the Future Fund to set up a new dedicated fund to expedite infrastructure works there.

He added that authorities are thinking of ways to streamline procedures paving the way for the creation of massive artificial islands for the Lantau Tomorrow project, such that reclamation can begin before the original start date of 2027, and people can start moving in before 2034.

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