Banks set to jostle over mortgage cash rebates

Finance | Eurus Yiu 20 Jul 2021

Banks are set to face more fierce competition in the property mortgage market with some poised to increase cash rebates.

Market insiders said large banks will raise their cash rebate from the previous 1 percent of the loan amount and some may even pump it up to 1.3 percent.

Ivy Wong Mei-fung, managing director of Centaline Mortgage Broker, said the aggregate balance of Hong Kong banking system has been standing at an historical high of HK$450 billion for 10 months, pushing down the one-month Hong Kong Interbank Offered Rate to 0.0786 percent as of yesterday, an 11-year low.

Abundant funds and a low-interest-rate environment have motivated banks to add more benefits to attract customers, Wong said.

Eric Tso, chief vice-president at mReferral Mortgage Brokerage Services, believed that the level of H+1.3 percent will be maintained during the year. Assuming the one-month Hibor stays below 0.1 percent, the actual interest rate will be around 1.5 percent.

He predicted that more banks will follow suit in the future, increasing the amount of cash rebates and gradually lowering the threshold of the required loan value.

In the primary market, Hip Shing Hong has opened show flats of Madera Garden in Ho Man Tin, offering 71 units with an area of 286 to 742 sq ft. The developer will reveal the first price list today.

Meanwhile, K&K Property released the second price list of 13 flats at SkyeHi in Tuen Mun after the first batch was oversubscribed five times with more than 300 checks.

The 13 flats, with areas of 265 to 290 sq ft, are offered at an average discounted price of HK$19,541 per sq ft, 6.3 percent higher than the first price list. The third price list will be released soon.

In the secondary market, a 2,657-sq-ft luxury home at No 1 Shouson Hill Road East sold for HK$200 million, or HK$75,272 per sq ft, according to Midland Realty.

And an 8,138-sq-ft site at No 12 Boyce Road in Wan Chai has been put out to tender with a reference price of HK$610 million, according to property broker JLL.

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