Hongkongers seen shifting to owning homes as mortgage rates drop

More Hong Kong residents may shift from renting to buying homes if mortgage rates continue to fall and the shortage of rental units persists, says Centaline founder Shih Wing-ching.

Hong Kong’s mortgage-linked one-month interbank rate fell for a seventh straight day to about 1.33 percent on Wednesday. The continuous drop in the one-month Hong Kong Interbank Offered Rate brings down the real mortgage rate to 2.63 percent.

If bank deposit rates continue to decline, investors may turn to buying properties for rental income, Shih said.

Shih believes Hong Kong’s housing market is increasingly likely to bottom out this year, citing improving affordability. He pointed to several supporting factors, including a nearly 30 percent drop in home prices from historic highs, continued economic growth, low unemployment, and rising per capita income.

Shih added that while developers still have unsold inventory, the city’s overall vacancy rate remains below 5 percent.

STAFF REPORTER