News release

Potential benefits of Mortgage relaxation to be visible in latter half of 2022

Flats priced between HKD 10 million and 12 million to benefit the most

March 31, 2022

Yvonne Liu

Public Relations Director, Hong Kong and Macao
+852 2846 5264

HONG KONG, 31 March 2022 – The government announced in the recent Budget Speech to lift the maximum property value limit for mortgage loans of high LTV ratio, which is a welcomed amendment. However, JLL expects any boosting effects will only become more visible when the pandemic stabilises in the latter half of the year, according to JLL's Hong Kong Residential Sales Market Monitor released today.

The relaxation would likely carry similar effects as the previous Mortgage Insurance Programme (MIP) adjustment announced in October 2019 and could strengthen housing market sentiment and boost both transaction volume and prices.

The measure will raise the maximum property value eligible for 90% LTV-ratio loans and 80% LTV-ratio loans to HKD 10 million and 12 million respectively. In addition, the arrangement allows a loan cap at HKD 9.6 million for properties up to HKD 19.2 million, smoothing out the mortgage waterfall for larger properties. Notably, transaction volume recorded a bounce of 43.9% m-o-m in November 2019 right after the previous MIP relaxation was announced. Particularly, units priced between HKD 8 million and 10 million surged significantly by 62.1%. Driven by the high level of activities, the housing prices of mass and medium units also registered a growth of 1.9% m-o-m in the same month, according to the Rating and Valuation Department.

While the latest arrangement is expected to benefit the overall housing market, some segments will benefit disproportionately. Specifically, the down-payment required for units priced between HKD 10 million and 12 million will drop significantly from 50% to 20% of the property value, allowing upgraders to take on pricier options. Properties falling in this price range will likely benefit the most when the effects come into place.

Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL, said: "On the downside, we believe the positive effects may be clouded by the fifth wave of the pandemic and current social distancing measures, resulting in considerably lower activity level in the housing market. In addition, with the market entering the rate hike cycle and potential buyers of mass and medium properties being relatively cost-sensitive, their buying sentiment is further dampened despite the latest MIP relaxation. We expect any boosting effects will only become more visible when the pandemic stabilises, which is likely in the latter half of the year."

Nelson Wong, Head of Research at JLL in Greater China, said: "On the other hand, the proposed adjustment is less relevant for first time homebuyers, who are still subject to the same borrowing requirements. However, there could still be a potential upside: as the upgrading ladder is smoothed out, more households may switch to the above-HKD 10 million market segment, rendering more availability in the lower-price segment. As supply rises, potential buyers are subject to more options to choose from, and sellers may also need to be competitive on pricing."

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 98,000 as of December 31, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit