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Monday, Oct 26, 2020

Hong Kong eases mortgage rules for commercial property

Hong Kong eases mortgage rules for commercial property

Hong Kong's banking regulator said on Wednesday it would relax commercial property mortgage rules, in a move to boost liquidity in a market that has been hit hard by U.S.-China trade tensions, violent street protests last year and the coronavirus crisis.
The change lifts the cap on the loan-to-value ratio for banks providing mortgages for non-residential properties to 50% from 40%, effective Thursday.

Hong Kong Monetary Authority (HKMA) deputy chief executive Arthur Yuen told a press conference the change was designed to make it easier for the commercial sector to obtain mortgages.

Hong Kong’s commercial property market, the most expensive in the world, saw a drop in transactions in the first half, with prices of offices and retail premises dropping 15% and 10% respectively from the second half of 2019, and the pressure is likely to remain, according to HKMA.
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