Gov't cautious on loan-to-value ratio

January 5, 2019

Financial Secretary Paul Chan:
Over the past two, three months we have been monitoring the property market very closely. The market is adjusting orderly. In considering whether and when to relax the mortgage ratio, we need to consider, number one, the downward adjustment in property price and also the pace of such adjustment, plus the premium between first-hand property price and secondary market property price in the vicinity. We are also monitoring the transaction volumes, how active the market is. We are also looking at the macro-economic situation as well as the short-term supply of properties.

This is a basket of factors. We want to find a time such that if there is any such relaxation, it would not be mistaken by the public as to the intention of the Government.

Factors need to be considered if the residential mortgage loan-to-value ratio is to be relaxed, Financial Secretary Paul Chan said today.

Speaking to reporters after attending a radio programme, Mr Chan said the Government has been monitoring the property market very closely over the past few months.

He said there are several factors to consider when deciding whether and when to relax the ratio.

“Number one, the downward adjustment in property price and also the pace of such adjustment, plus the premium between first-hand property price and secondary market property price in the vicinity.”

Other factors include the transaction volumes, the macro-economic situation and the short-term property supply, he added.