Hong Kong Banks Ignite Housing Market Rebound with Mortgage Rebates Amid Anticipated Rate Cuts

Banks in Hong Kong are providing mortgage cash back deals as they anticipate a resurgence in the housing market due to probable rate reductions. These lenders are sparking a competitive environment for home purchasers, expecting an increase in dealings.

Certain financial institutions are providing a discount ranging from 0.1% to 0.25% to potential loan applicants, based on the size of the loan and their credit score, as reported by Centaline Mortgage Broker. Local news sources have identified Bank of China (Hong Kong) and Standard Chartered as some of these institutions.

"Increasing the discounts to lure potential homeowners demonstrates the optimistic view of banks" concerning the future of the real estate market, according to managing director Ivy Wong Mei-fung. She also indicated that "it is probable that other banks will adopt similar strategies."

Banks have been wary of approving new home loans due to the financial impact of the Covid-19 pandemic on families. The impact of the city's significant measures in February to stimulate the market has been declining as property prices have dipped. However, the impending interest rate cut has prompted banks to discard their careful approach and streamline the process for mortgage applications, she further noted.

"Eric Tso Tak-ming, the Chief Vice-President of mReferral, a mortgage broker in Hong Kong, anticipates the Federal Reserve to declare a reduction in rates later this month," he stated. He also believes that this could lead to a similar decrease in Hong Kong's Hibor rates, which would help alleviate the financial strain on banks' mortgage funding expenditures.