Budget 2022-2023: Hong Kong opens funding tap to make more mortgage loans available for first-home buyers, dealing a blow to ‘nano flat’ builders

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The available mortgages on homes with a loan-to-value ratio of 80 per cent will increase to between HK$10 million and HK$12 million in the fiscal 2022/23 budget

First-home buyers who qualify for the higher loan-to-value ratio of 90 per cent can borrow between HK$8 million and HK$10 million, more than the previous HK$8 million

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Potential buyers viewing an apartment model at the sales office of the #LYOS housing project at CK Asset Holding’s sales office in Hung Hom on 4 November 2021. Photo: Edmond So

Lam Ka-sing

Published: 6:30pm, 23 Feb 2022Updated: 7:12pm, 23 Feb 2022

Hong Kong’s government will raise the amount of mortgages available in home loans to help more residents in the city’s pandemic-stricken economy get on the property ladder and forestall a market slump.

Starting from February 23, the available mortgages on homes with a loan-to-value ratio of 80 per cent will increase to a maximum of HK$12 million (US$1.54 million) from HK$10 million, according to the fiscal 2022/23 budget presented by Financial Secretary Paul Chan Mo-po.

First-home buyers who qualify for the higher loan-to-value ratio of 90 per cent can borrow up to HK$10 million in mortgage financing, more than the previous maximum of HK$8 million, according to the plan.

The relaxation on the financing tap would make larger abodes more affordable to first-time buyers, helping to remove so-called nano flats -tiny apartments typically smaller than 200 square feet (18.6 square metres) – as the sole property type within their financial reach. About 2,015 of these diminutive homes are scheduled for completion this year, the highest number since they first emerged in 2013, according to JLL.

“Some buyers would shift to buying bigger flats at a higher price” because of the financing available, “which will provide developers with the incentive to build larger flats,” said Nelson Wong, head of research at JLL in Greater China.