Amid intensifying competition between banks for mortgage business and reports of the Hong Kong Monetary Authority informing banks verbally that they must restrict rebates on such loans immediately, the HKMA had come out to say it is not setting any new caps.
A spokesperson from the authority said it is already a requirement that if a bank offers a cash rebate or cash- equivalent incentive that exceeds 1 percent of the amount of the mortgage loan then the bank should treat the sum as part of the mortgage loan when calculating the loan-to-value ratio.
It has been a practice for some banks when dealing with a client referred by another customer to give a cash rebate to the successful mortgage applicant and to the person who made the introduction. But a cash reward for the referrer would not be counted within the rebate for the mortgage applicant.
In fact, it seems the authority wants to send a message about potential risks if the homes market becomes overheated.
A research report by Jones Lang Lasalle, meanwhile, said recent signs of stabilization in residential property sales do not indicate the property market has turned a corner, especially as several projects with more than 1,000 flats each are being launched in August and could bite into the secondary market.
Back on more basic business, Sino Land (0083) said 50 units of its Riverwalk project in Mui Wo on Lantau are only available for renting at the present time.
Roger Poon, associate director of property investment and management of Sino Group, said 30 flats were offered in May and so far 22 have been rented.
Rents for the flats range from HK$8,800 to HK$25,800 monthly.