It has interest rates of 2.75%, 2.85%, and 2.95% per annum for periods of 10, 15 and 20 years, respectively.
Finance secretary Paul Chan has announced during his Budget speech that the Hong Kong Mortgage Corporation (HKMC) will float a fixed-rate mortgage loan pilot scheme that aims to provide property owners more loan options and reduce interest rate volatility risks.
The scheme will have interest rates of 2.75%, 2.85%, and 2.95% per annum for loan periods of 10, 15 and 20 years, respectively.
It will be carried out through banks, without stress-test requirements and capped at $10m per application.
Other property-related plans mentioned in the Budget include the launching of six commercial sites for tender during 2020 to 2021. These sites could yield a total of 8.9 million sqft gross floor area (GFA) to be delivered no earlier than 2024 to 2025. This is said to be the highest total in any financial year since 2011-2012.
“The government’s plan to offer several large commercial sites for tender in FY2020/2021 will provide a welcome medium-to-long-term boost for local real estate occupiers and developers. However, further economic turbulence expected over the course of 2020 may negatively impact the response to sites with especially high price tags,” said Marcos Chan, head of research at CBRE.
Furthermore, the government plans to have 15 residential sites put up for sale, which will house 7,500 units. Another 8,200 units are also expected to be delivered by the MTR Corporation (MTRC), the Urban Renewal Authority (URA) and other private sector redevelopment schemes.
The government expects an average of 19,600 private residential units to be delivered in each of the next five financial years.
“Despite the current economic uncertainty, the low level of new residential supply – which will remain at under 20,000 units a year for the next few years – will limit the risk of over-supply and prevent a drastic correction in capital values,” Chan further commented.
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