HSBC cuts mortgage cash rebates in half

Business | Stella Zhai 14 Aug 2019

Hongkong and Shanghai Banking Corp has cut the cash rebate rate in connection with residential mortgages to 1 percent for loans below HK$10 million, and to 1.5 percent for those above HK$10 million, regardless of mortgage type, reflecting a pessimistic property market outlook.

The latest cut came after the bank in June lowered the cash rebate rate from 2.07 percent to 1.5 percent for customers transforming their mortgage to HSBC. But this time, the rate cut applies to mortgages for both new and second-hand flats, representing a 100-basis-point decrease from 2 percent to 1 percent.

Taking an HK$4 million mortgage as an example, the borrower can only get a HK$40,000 cash rebate now - half of the HK$80,000 dished out previously.

A week after parent HSBC (0005) ousted its chief executive John Flint, the top lender in the SAR seems to be slowing down its mortgage loan growth, given the ongoing trade tensions between the United States and China, as well as the local political unrest. Industry analysts expect other major banks will follow HSBC's lead to cut their mortgage rebate rates.

Meanwhile, in the secondary market, some homeowners are selling their properties even at a loss. A 300-square-foot unit at Twin Regency in Yuen Long sold for HK$4.48 million, or HK$240,000 less than the HK$4.72 million the vendor bought it for three years ago.

A 2,396-sq-ft luxury house at Kennedy Park in Mid-Levels changed hands for HK$165 million - representing a loss of HK$30 million, including taxes.

CK Asset's (1113) executive director Justin Chiu Kwok-hung commented that it would be difficult for developers to launch new luxury projects, and the market sentiment will deteriorate in the second half.

Separately, Sun Hung Kai Properties (0016) pleaded guilty yesterday, and was fined HK$50,000 for failing to provide enough information as to terms of payment in the Register of Transactions when selling its St Martin by tender in March, in violation of the Residential Properties (First-hand Sales) Ordinance.

SHKP had listed a cash rebate for the buyers of the units B2 on 2/F, 3/F and 5/F of Tower 1, Phase I of St Martin, but without setting out the rebate rate.

Search Archive

Advanced Search
January 2020

Today's Standard

Yearly Magazine

Yearly Magazine