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Hong Kong home prices may fall by 5% as 7 banks set to raise mortgage rates


Hong Kong home prices seen falling by 5 per cent after 7 major lenders including HSBC, Standard Chartered set to increase mortgage rates

The effective mortgage rate for new loans from HSBC, Hang Seng, BOCHK, Standard Chartered and BEA will rise by 50 basis points on MondayThe higher mortgage rates will pressurise home prices to fall by 3 to 5 per cent in the next few months, property agents sayHong Kong propertyEnoch YiuPublished: 6:00am, 18 Sep, 2023Why you can trust SCMP

Hong Kong home prices are set to fall by about 5 per cent by the end of this year, analysts say, after seven major lenders, including the three note-issuing banks – HSBC, Standard Chartered Bank, and Bank of China (Hong Kong) – said they will raise their mortgage rates as early as Monday.

The trio, together with Hang Seng Bank and Bank of East Asia from will increase mortgage rates for new loan applications by 50 basis points on Monday, while Citibank will make a similar increase on Wednesday (September 20), the lenders’ spokesmen said in a reply to the Post’s inquiries.

The effective mortgage rate for new loans by these six lenders, which control 80 per cent of the mortgage market, will be increased from 3.625 per cent to 4.125 per cent. Existing home loans will not be affected.

The payment on a typical HK$5 million (US$643,000) mortgage over 30 years will increase by 6 per cent after the mortgage rate increases, or by HK$1,430 per month to HK$24,232, according to calculations made by mortgage broker mReferral.

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