South China Morning Post
Greater Bay Area: Hongkongers seen boosting demand for homes as banks dangle cheaper loans, easier cross-border payment facility
Industrial and Commercial Bank of China (Asia), the native unit of China’s largest lender by property, mentioned demand from native consumers for mortgage financing of Bay space houses surged final quarter because the economies in mainland and Hong Kong confirmed indicators of restoration following forecasts for annual development in 2021. Do you may have questions concerning the largest subjects and traits from all over the world? Get the solutions with SCMP Knowledge, our new platform of curated content material with explainers, FAQs, analyses and infographics introduced to you by our award-winning workforce. The financial institution noticed a tenfold improve in such purposes in 2020 over 2019, Leung added. Zhuhai and Zhongshan had been the favorite picks of Hongkongers, who accounted for 85 per cent of the purposes. Home transactions within the Greater Bay Area involving Hongkongers sank 46 per cent to 161,000 in 2020 due to the stringent border restrictions amid the Covid-19 pandemic, in accordance to Centaline Property Agency. That ought to rebound by about 25 per cent to greater than 200,000 this yr as vaccination programmes broaden and travel curbs eased. The Greater Bay Area covers Hong Kong, Macau and 9 cities in southern Guangdong province. Relatively decrease home costs in mainland cities and improved cross-border transport hyperlinks such because the Hong Kong-Zhuhai-Macau Bridge and Hong Kong-Shenzhen specific rail have reduce travelling time and raised the enchantment of residence possession there. House costs within the Greater Bay Area are expected to proceed to development upwards, with 5 cities marking a report excessive in March, in accordance to Centaline. Shenzhen, one of many 5, has damaged value data for 19 straight months, it added. ICBC (Asia) affords mortgages which permit Hong Kong consumers the choice to pay the down cost and month-to-month instalments utilizing the native greenback with out the necessity to go to mainland branches, sidestepping the trouble of cross-border remittances and foreign-exchange fluctuations. The down cost may very well be transferred by the financial institution to the applicant’s yuan-denominated account in mainland China beneath the identical identify, which might be disbursed to the house builders thereafter. Without this association, homebuyers would have to open a mainland checking account, take a mortgage from a mainland lender and remit the home funds from Hong Kong, topic to day by day switch limits. Leung mentioned the ICBC (Asia)’s plan caps the mortgage dimension at HK$10 million at 3.25 per cent every year with a most loan-to-value ratio of 60 per cent and reimbursement phrases of up to 30 years. Other mainland lenders in Hong Kong, comparable to China Citic Bank, Bank of China, and China Construction Bank, are additionally providing related mortgage facility. “The interest rate is much lower compared to the 5 to 6 per cent range offered by other banks in mainland China,” mentioned Kostka Cheung, chief working officer at mReferral Mortgage Brokerage Services. “This is the lowest interest rate available in the market.” Potential consumers on the gross sales centre of Leading New Wave by Poly Property and Country Garden, in Zhongshan. Photo: Pearl Liu alt=Potential consumers on the gross sales centre of Leading New Wave by Poly Property and Country Garden, in Zhongshan. Photo: Pearl Liu> Based on these phrases, a flat costing HK$5 million would require a month-to-month reimbursement of HK$13,056, in accordance to mReferral. For HK$5 million, one may buy a flat measuring 1,141 sq ft (106 sq m) in gross ground space with three rooms in Shenzhen’s northeastern Longgang district, in accordance to listings from Centaline. The sum would solely buy a 354-sq ft flat at Kweilin House, a 41-year previous growth in Tsuen Wan Centre. Midland China expects round 70 per cent of its clients who buy mainland properties would go for making use of for a mortgage as a substitute of paying in full, up from about 50 per cent, as native banks begin providing mortgages on mainland properties to Hong Kong buyers. “Given the convenience and lower interest rates, I believe that more buyers would opt to take the mortgage from a local bank” with out having to bear the forex danger, mentioned Anita Wong, Hong Kong-based assistant basic supervisor for Greater Bay Area gross sales and advertising and marketing at Midland. This article initially appeared within the South China Morning Post (SCMP), essentially the most authoritative voice reporting on China and Asia for greater than a century. For extra SCMP tales, please discover the SCMP app or go to the SCMP’s Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.