Hong Kong Banks, Developers Offer Sweeteners After Rate Increase
(Bloomberg) -- Hong Kong banks and developers are offering homebuyers cash rebates and discounts just a week after mortgage rates rose, in the latest sign the city’s red-hot housing market is cooling.
BOC Hong Kong (Holdings) Ltd. and CMB Wing Lung Bank Ltd. are offering rebates of up to 2 percent of the loan value for new-home mortgages, the Hong Kong Economic Times reported Thursday, citing unidentified sources. Citigroup Inc. is said to have lowered the cap for its Hibor-linked mortgage rate by 10 basis points, the newspaper said.
Citigroup said it wouldn’t comment on market rumors. BOC and CMB Wing Lung Bank didn’t immediately respond to requests for comments.
For more on signs Hong Kong’s property market is cooling:
Developers are also offering perks to attract buyers. Lai Sun Development Co. cut the price of some units at its Monti project by 10 percent on Wednesday, and is giving buyers furniture vouchers worth as much as HK$120,000 ($15,300).
Vanke Property (Hong Kong) Co., the local arm of China Vanke Co., is offering buyers at its Le Pont development in the New Territories mortgages between 10 basis points to 20 basis points below market rates, and cash rebates of as much as 1.95 percent of the mortgage amount.
Rising interest rates and increasing supply over the next two years have prompted developers to speed up sales ahead of a vacancy tax that will penalize firms for holding onto empty apartments.
“The cooling measures carried out by the government earlier this year have heightened the cost of keeping inventory for developers, so they need this kind of marketing campaign to attract buyers,” said Thomas Lam, an executive director at Knight Frank LLP.
Hong Kong’s property market is already showing signs of slowing after prices more than quadrupled since 2003. The number of transactions in the secondary market slumped 32 percent in September from the previous month to a 30-month low, according to Centaline Property Agency Ltd. New-home transactions fell 16 percent last month.
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