Tuesday, December 04, 2012

Cooling measures ignite HK mortgage war

Hong Kong banks are likely to fight it out in a mortgage war due to the shrinking home loan market caused by the government’s property cooling measures, according to The Standard.

Considered one of the largest lenders in the Special Administrative Region (SAR), Citibank is expected to slash its Hibor-based loan rate from H+2.5 percent to H+1.7 percent.

As of yesterday, the one-month Hong Kong Interbank Offered Rate (Hibor) was at 0.28 percent. This means that Citibank will offer the same rate as Dah Sing Bank, Wing Hang Bank and Standard Chartered Bank following its rate cut from 2.78 to 1.98 percent.

“Local lenders are likely to join the price war in a bid to attract clients whose sentiment was dampened by a heavier tax,” said Alan Luk Ting-lung, Head of Investment Advisory Services at Hang Seng Bank.

The tax refers to the 15 percent buyers stamp duty (BSD) that non-locals pay when purchasing a property. This has been blamed for the 30 percent drop in the home lending business of the top three mortgage lenders in Hong Kong during October.

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