HKMA Pays Attention to Construction Period Payment Risks.

28Hse Editor  2020-03-03 
There is a first-hand housing estate that has 80% of buyers choosing construction period payment. The government relaxed the property price upper limit of the mortgage insurance plan in the policy address last year. More and more buyers in the first-hand property market choose "construction period payment" since the new measure only applies to existing buildings. The HKMA reminded the public yesterday that if there is an adjustment in the property price before the occupation, buyers may face the risks. Besides, Jyu Wai-Man, the President of the HKMA, also points out that there is no sign of cyclical change in the property market. Therefore, it is necessary to observe whether to adjust the "counter-cyclical" measures in response to the epidemic. Journalist (Chau Siu-Kei) The COVID-19 epidemic has impacted the global economy. Voices are calling for the government to "relax the strict measures" to reduce the economic damage to the economy from a sharp drop in property prices in case. At the Legislative Council meeting yesterday, Jyu Wai-Man pointed out that it is still necessary to observe the evolution of the property market cycle over a more extended period, including how the COVID-19 epidemic affects, before deciding whether to adjust macro-prudential measures, although the property prices have been relatively stable in the past few months. He pointed out that counter-cyclical measures are mainly aimed at the cyclical changes in the property market, and factors such as transactions, prices, Hong Kong, and the external economy must be considered. It is unlikely to relax strict measures and needs to keep an eye on risks. The HKMA not only maintains its strict measures but also posted on social networking sites in the evening, reminding home buyers to "pay attention to the risks when choosing construction period payment." According to the post, HKMA has noticed that more and more first-hand property buyers choose construction period payment since the increase in the property price upper limit for mortgage insurance in October last year. Recently, some housing estate even has more than 80% of buyers choose this payment arrangement. The HKMA pointed out that purchasers would have to pay more for the down payment to achieve the mortgage if the valuation is lower than the actual property price at the time of occupation base on the "construction period payment." The outbreak of the epidemic has hit the global economy, including consumption and investment, services, and merchandise exports. The HKMA announced the results of the "SME Loans Survey" in the fourth quarter of last year. 73% of SME respondents believe that the approval of bank loans in the fourth quarter of the previous year is easier or no different than that of 6 months ago. It fell 2%, and 27% of respondents believe that the difficulty of obtaining loans has increased. Yuen Kwok-hang, the Vice President of HKMA, expresses that they would continue to communicate with the industry to provide support to SMEs and individuals. 100% Financing Guarantee is a "Timely Rain." Jyu Wai-Man emphasizes that different measures have been taken to strengthen the bank's credit capacity to support the real economy, especially SMEs. Although some insiders point out that the loan amount of "100% Guarantee Special Offer" under the SME Financing Guarantee Scheme is relatively low, he believes that it is "timely rain" for the enterprises. He hopes to launch the scheme within one month after the approval of the funding or even shorter, also believes the approval will be accelerated. It is emphasized that the bank deposits maintain stability. Also, Jyu Wai-Man emphasizes that the Hong Kong dollar and bank deposits remain stable, and would closely monitor the impact of the epidemic on the banking system. As of the middle of February, the data showed that the growth of bank loans had been flat, due to the Lunar New Year holiday in February and slowed economic and credit growth affected by the epidemic. While the banking assets quality still maintains good.
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