The Hong Kong Monetary Authority may scrap a programme that offers mortgage insurance for investment properties as the city’s central bank tries to prevent a real estate bubble.
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| Window shopping: Since most home buyers pay in cash, tightening lending requirements or raising mortgage rates would be of little help in cooling down the luxury market |
Home-loan insurance for investment properties accounts for about one per cent of Hong Kong’s overall mortgage insurance programme, said HKMA spokeswoman Alice Lo in an interview yesterday. Mortgage insurance allows home buyers to borrow beyond 70 per cent of the property’s purchase price.
The insurance programme covering investment properties may be scrapped ‘to tackle the speculative trend of the surging market,’ Ms Lo said.
Home prices in Hong Kong have rallied this year on record low interest rates and an influx of money from China. Sales of luxury homes worth more than HK$10 million (S$$1.8 million) almost tripled in September, according to the Land Registry. Hong Kong’s leader, Chief Executive Donald Tsang, signalled on Oct. 14 that his government may release more land to deflate a property bubble. Continue reading
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