Hong Kong Issues New Property Mortgage Loan Guidelines Including Increasing Self-Occupied Residential Properties Loan Ratio to 70% for Properties Belo
Hong Kong | Leading Financial Centre in Asia Caproasia.com | The leading source of data, research, information & resource for financial professionals, investment managers, professional investors, family offices & advisors to institutions, billionaires, UHNWs & HNWs. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Caproasia - Learn more Caproasia Access | Events | Summits | Register Events | The Financial Centre The 2024 Investment Day | 2024 Family Office Summits | Family Office Circle This site is for accredited investors, professional investors, investment managers and financial professionals only. You should have assets around $3 million to $300 million or managing $20 million to $3 billion. 
Hong Kong Issues New Property Mortgage Loan Guidelines Including Increasing Self-Occupied Residential Properties Loan Ratio to 70% for Properties Below $3.8 Million Value & 60% Loan Ratio for Properties Above $3.8 Million Value, Non-Residential Properties Loan Ratio Will Increase from 60% to 70% 1st March 2024 | Hong Kong
The Hong Kong Monetary Authority (HKMA) has issued new property mortgage guidelines (effective 28/2/24) including increasing self-occupied residential properties loan ratio to 70% for properties below $3.8 million value (HKD 30 million) and 60% loan ratio for properties above $3.8 million value (HKD 30 million). Non-residential properties loan ratio will increase from 60% to 70%. HKMA: “Property prices continue to adjust recently. Official residential property prices decreased by 7% in 2023, and further declined by 1.6% in January 2024, with a cumulative correction of more than 20% from their peak in 2021. Residential property transaction volume stayed low with an average number of transactions of 3,584 per month in 2023, representing an annual decline of 4.5%. The situation in the non-residential property market is similar. The average prices of offices fell by approximately 7% in 2023, while market data showed that the vacancy rate of Grade A offices rose to about 16% at the end of last year. Meanwhile, the external and domestic economic outlooks are still subject to many uncertainties. After detailed analyses, the HKMA considers that there is room to adjust the countercyclical macroprudential measures for property mortgage loans and to suitably adjust other related supervisory requirements on property loans, while continuing to maintain banking stability and ensuring the proper risk management of property lending by banks.” See below for more info:
“ Hong Kong Issues New Property Mortgage Loan Guidelines Including Increasing Self-Occupied Residential Properties Loan Ratio to 70% for Properties Below $3.8 Million Value & 60% Loan Ratio for Properties Above $3.8 Million Value, Non-Residential Properties Loan Ratio Will Increase from 60% to 70% “
- Article continues below - Quick Links, Ads & Announcements Caproasia Access | Events | Summits | Register Events | The Financial Centre The 2024 Investment Day | 2024 Family Office Summits | Family Office Circle Sign Up Basic Member: $5 Monthly | $60 Yearly Newsletter Daily 2 pm (Promo): $20 Monthly | $180 Yearly (FP: $680) The 2024 Investment Day 6th March Hong Kong | 13th March Singapore Private Equity, Hedge Funds, Boutique Funds, Private Markets & more. Taking place on 6th March 2024 in Hong Kong, 13th March 2024 in Singapore. Visit | Register here The 2024 Family Office Summit10th April Hong Kong | 24th April Singapore Join 100+ single family offices & family office professionals in Hong Kong & Singapore Links: 2024 Family Office Summit | Register here
Hong Kong Issues New Property Mortgage Loan Guidelines Including Increasing Self-Occupied Residential Properties Loan Ratio to 70% for Properties Below $3.8 Million Value & 60% Loan Ratio for Properties Above $3.8 Million Value, Non-Residential Properties Loan Ratio Will Increase from 60% to 70%
Hong Kong | Leading Financial Centre in Asia 28th February 2024 – The Hong Kong Monetary Authority (HKMA) today (28 February) issued guidelines to banks adjusting the countercyclical macroprudential measures for property mortgage loans and other related supervisory requirements.
Property prices continue to adjust recently. Official residential property prices decreased by 7% in 2023, and further declined by 1.6% in January 2024, with a cumulative correction of more than 20% from their peak in 2021. Residential property transaction volume stayed low with an average number of transactions of 3,584 per month in 2023, representing an annual decline of 4.5%. The situation in the non-residential property market is similar. The average prices of offices fell by approximately 7% in 2023, while market data showed that the vacancy rate of Grade A offices rose to about 16% at the end of last year. Meanwhile, the external and domestic economic outlooks are still subject to many uncertainties.
After detailed analyses, the HKMA considers that there is room to adjust the countercyclical macroprudential measures for property mortgage loans and to suitably adjust other related supervisory requirements on property loans, while continuing to maintain banking stability and ensuring the proper risk management of property lending by banks:
- (1) For residential properties for self-occupation, the maximum loan-to-value (LTV) ratios will be adjusted to 70% for properties valued at HK$30 million or below; and 60% for properties valued at HK$35 million or above. To avoid a sudden drop in applicable LTV ratios, ratios for properties valued between HK$30 million and HK$35 million will be adjusted downward gradually. For non-self-use residential properties, the maximum LTV ratio will be adjusted from 50% to 60%.
- (2) The maximum LTV ratio for non-residential properties (including offices, retail shops and industrial buildings) will be adjusted from 60% to 70%.
- (3) For mortgage loans assessed based on the net worth of mortgage applicants, the maximum LTV ratio will be adjusted from 50% to 60%. This adjustment is applicable to both residential properties and non-residential properties.
- (4) With the US Federal Reserve recently expressing that the US rate hike cycle might be approaching an end, the probability of a further increase in mortgage interest rates in Hong Kong in the near future is relatively low. The HKMA therefore considers it appropriate to suspend the interest rate stress testing requirement for property mortgage lending that assumes a 200-basis-point rise in the mortgage rate.
- (5) The HKMA tightened the financing caps for property development projects in June 2017. In view of the current property market situation, the HKMA considers it appropriate to raise the relevant financing caps back to the pre-2017 levels – in other words, the overall financing cap will be increased from 50% of the expected value of the completed properties to 60%, within which the financing cap for the value of the property site will be increased from 40% to 50% and the financing cap for the construction cost will be increased from 80% to 100%. In addition, the existing requirement for banks to set aside additional capital for exposures to property developers which offer mortgage financing with high LTV ratios will be lifted.
These adjustments will take effect from today and apply to property transactions with provisional sale and purchase agreements signed today or subsequently.
The HKMA will continue to monitor market developments closely and introduce measures to safeguard banking stability as conditions in the property market evolve.
Managing $20 million to $3 billion. Investing $3 million to $300 million. For Investment Managers, Hedge Funds, Boutique Funds, Private Equity, Venture Capital, Professional Investors, Family Offices, Private Bankers & Advisors, sign up today. Subscribe to Caproasia and receive the latest news, data, insights & reports, events & programs daily at 2 pm. Join Events & Find Services Join Investments, Private Wealth, Family Office events in Hong Kong, Singapore, Asia-wide. Find hard-to-find $3 million to $300 million financial & investment services at The Financial Centre | TFC. Find financial, investment, private wealth, family office, real estate, luxury investments, citizenship, law firms & more. List hard-to-find financial & private wealth services. Have a product launch? Promote a product or service? List your service at The Financial Centre | TFC. Join interviews & editorial and be featured on Caproasia.com or join Investments, Private Wealth, Family Office events. Contact us at [email protected] or [email protected] Caproasia.com | The leading source of data, research, information & resource for financial professionals, investment managers, professional investors, family offices & advisors to institutions, billionaires, UHNWs & HNWs. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Quick Links Caproasia Access | Events | Summits | Register Events | The Financial Centre The 2024 Investment Day | 2024 Family Office Summits | Family Office Circle 2021 Data Release 2020 List of Private Banks in Hong Kong2020 List of Private Banks in Singapore 2020 Top 10 Largest Family Office2020 Top 10 Largest Multi-Family Offices2020 Report: Hong Kong Private Banks & Asset Mgmt - $4.49 Trillion2020 Report: Singapore Asset Mgmt - $3.48 Trillion AUM For Investors | Professionals | Executives Latest data, reports, insights, news, events & programs Everyday at 2 pm Direct to your inbox Save 2 to 8 hours per week. Organised for success Register Below For CEOs, Heads, Senior Management, Market Heads, Desk Heads, Financial Professionals, Investment Managers, Asset Managers, Fund Managers, Hedge Funds, Boutique Funds, Analysts, Advisors, Wealth Managers, Private Bankers, Family Offices, Investment Bankers, Private Equity, Institutional Investors, Professional Investors Get Ahead in 60 Seconds. Join 10,000 + Save 2 to 8 hours weekly. Organised for Success. Sign Up / Register You are:
InvestorProfessionalFamily OfficeExecutive
Select:
SubscriptionMembershipEvents
Interests / Events / Summits / Roundtables / Networking:
Professional InvestorPrivate WealthFamily OfficePrivate BankingWealth ManagementInvestmentsAlternativesPrivate MarketsCapital MarketsESG & SICEO & EntrepreneursTax, Legal & RisksHNW & UHNWs Insights
Your Name*
Company*
Job Title*
Email 1 (Work / Personal)*
Email 2 (Work / Personal)
Country
New to Caproasia Learn More | Sign Up | Subscribe | Register Events Caproasia Users - Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
- Professional Investor
- Family Office
- HNW Partnership
- Family Office Circle
- Family Office Networking
- Family Office Roundtable
- The Family Office Summit
- March 2024 - Hong Kong
- March 2024 - Singapore
- June 2024 - Hong Kong
- June 2024 - Singapore
- Sept 2024 - Hong Kong
- Sept 2024 - Singapore
- Visit: The Investment Day | Register: Click here
- The Investment Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
Owl Media Group takes pride in providing social-first platforms which equally benefit and facilitate engagement between businesses and consumers and creating much-needed balance to make conducting business, easier, safer, faster and better. The vision behind every platform in the Owl Media suite is to make lives better and foster a healthy environment in which parties can conduct business efficiently. Facilitating free and fair business relationships is crucial for any thriving economy and Owl Media bridges the gap and open doors for transparent and successful transacting. No advertising funds influence the functionality of our media platforms because we value authenticity and never compromise on quality no matter how lucrative the offers from advertisers may seem.