Banks should provide more support to commercial and industrial properties to balance the market, said Centaline chairman Shih Wing-ching, as they are currently leaning towards loaning to residential properties and current return on shops is 4 to 5 percent, with the risk being relatively low.
He also noted that the government could also consider lowering the stamp duty on commercial and industrial properties to stimulate transactions and gradually restore market confidence, in light of a 40-year-high commercial property vacancy rate of 12.5 percent, at a forum held by think tank 107 Momentum on the chain effects of the poor commercial property market.
Tony Kwok Tak-leung, chairman of Guangdong Hong Kong Macau Greater Bay Area General Chamber of Real Estate Industry, stated that current mortgage interest rates are at least 5 to 6 percent, yet shop owners who continue to make payments are still being called into loans by banks.
Raymond Ho Man-kit, convenor of 107 Momentum, stated that the rapid decline in commercial property prices quickly drains available social capital, suppressing investment and consumption. On the other hand, banks are pressuring owners to lower prices to repay debts while refusing to grant mortgages to new buyers, further shrinking transactions and creating a vicious cycle.
