New property cooling measures will see higher down payments for Hong Kong buyers
New mortgage-tightening measures will require homebuyers to come up with at least 40pc of price for properties costing under HK$7 million
Homebuyers will need to come up with a higher down payment for properties under HK$7 million in a new round of mortgage-tightening measures announced yesterday by the Hong Kong Monetary Authority after prices in the city's residential market hit an all-time high.
It is the seventh lot of measures introduced to cool the market since February 2013.
HKMA chief executive Norman Chan Tak-lam said the loan-to-value ratio for residential properties under HK$7 million would be capped at 60 per cent, down from the existing range of 60 to 70 per cent. That means buyers will need to pay a higher down payment.
Second home-buyers will find it more difficult to borrow as the measures - which take effect immediately - also lower the maximum debt-service ratio (DSR), the monthly repayment of the borrower as a percentage of monthly income, from 50 per cent to 40 per cent.
"This latest round of countercyclical measures will inevitably affect the home purchase plans of some people, including first-time buyers," said Chan. "However, it is the duty of the HKMA to undertake whatever supervisory measures are necessary to safeguard banking and financial stability as and when the property cycle evolves."
Click to enlarge
