After the Financial Secretary of the Hong Kong Special Administrative Region Government, Mr Chan Mao-po, announced the complete “elimination” of the property market in the “Budget”, the Hong Kong Monetary Authority (HKMA) immediately launched the “Five Punch Axe”.
On February 28, shortly after “Grandpa Chan” Chen Maobo announced the “withdrawal” of the property market, the HKMA announced the “Countercyclical Macroprudential Supervision Measures for Property Mortgage Loans”, issuing guidelines to banks to revise countercyclical macroprudential supervision measures and other relevant regulatory requirements applicable to property mortgage loans.
The HKMA said that real estate prices have continued to be adjusted recently. Official residential property prices fell 7% for the full year of 2023, and fell further by 1.6% in January 2024, with a cumulative adjustment of more than 20% compared to the high level in 2021. Residential property transactions remained low, with an average monthly average of 3,584 transactions in 2023, a decrease of 4.5% year-on-year. The situation in the non-residential property market is similar. The average price of office buildings fell by about 7% in 2023. Market data showed that the vacancy rate of Grade A office buildings rose to about 16% at the end of last year. Furthermore, the outlook for the peripheral and local economies continues to face many uncertain factors.
After careful analysis, the HKMA believesOn the premise of continuing to maintain the stability of the banking system and ensure proper management of mortgage business risks, there is room to revise countercyclical macroprudential supervision measures for property mortgage loans and adjust other regulatory requirements related to real estate loans as appropriate:
First:The maximum mortgage ratio for private use residential properties worth HK$30 million or less was adjusted to 70%;...