Hong Kong warns against home loan risks as prices soar

A new round of cooling measures loom ahead.

Bloomberg reported that the Hong Kong Monetary Authority has warned banks in the city over the rising risks of property lending, according to the Oriental Daily, just as home prices notch up another record in the world’s most expensive housing market and Citigroup Inc. sees an imminent round of new cooling measures.

The authority sent letters this week raising concern over the increasing number of highly leveraged mortgages provided by developers, which boosts risks for banks lending to these companies, according to the Daily and other media reports on Saturday, citing unidentified people. It may tighten risk management and said banks should be prudent when lending to clients who buy multiple units with a single contract, the reports said.

Hong Kong’s property market is on a roll, stoking discontent among the city’s residents and posing a headache for incoming Chief Executive Carrie Lam.

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