Mortgage rules for retail, commercial and industrial properties will be eased starting from Thursday, Hong Kong’s de facto central bank has announced in a bid to boost a flailing property market that has been ravaged by the ongoing pandemic.

Banks would be allowed to increase lending for buyers of office, industrial and retail space via the lifting of the maximum loan-to-value ratio to 50% from 40%, the Hong Kong Monetary Authority said on Wednesday.

The higher LTV ratio will allow buyers to borrow more money for non-residential property purchases, at the same time paying 10% less upfront in down payment.

For example, a Hong Kong buyer who does not have any other mortgage and passes certain stress tests would be able to borrow up to HK$5 million (US$645,200) for a HK$10 million property under the new rules, instead of the current HK$4 million.

Cookie Wong, managing director of Ricacorp Mortgage Agency, suggested the government raise the maximum LTV ratio further, up to 60%, and extend the repayment period from 20 years to 30 as the latest measure might not completely offset falling property valuations.

Source:Apple daily2020.08.20 21:03

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