HK Landlords: Bank Mortgage Curbs Deepen Shop Slump
Hong Kong property owners and industry figures claim local banks are worsening the city's commercial shop downturn. They accuse banks of restricting commercial mortgages, which impedes transactions despite falling property values.
Banks Blamed for Commercial Property Drag
Hong Kong's property sector stakeholders accuse local banks of exacerbating the city's shop slump. An advocacy group, Momentum 107, states banks restrict commercial mortgages, leaving many potential buyers unable to secure financing. This occurs even as shop property values have declined significantly over the past few years. The group contends this reluctance to lend hinders transactions and prolongs a broader economic drag.
Dual Pressure on Owners and Buyers
Banks are reportedly pressing current commercial property owners for loan repayments, even as asset values fall. Simultaneously, they refuse to provide mortgages to new buyers. Raymond Ho, convenor of Momentum 107, noted this discourages both end-users and investors from entering the market.
The sharp decline in shop values has also eroded available capital, weighing on investment and consumption within the sector.
Residential Market Contrast
The commercial property financing challenges contrast sharply with Hong Kong's residential market. Residential property gained momentum this year, with banks actively competing for mortgage borrowers. However, for commercial shop deals, financing often becomes difficult at the approval stage.
Shih Wing-ching, founder of Centaline Property, stated many clients ultimately fail to secure funding at the last minute.
This banking stance creates a liquidity crunch for Hong Kong's commercial property segment. The reduced transaction volume and constrained capital flow will likely extend the current downturn. Investors in the city's retail property market face prolonged asset value depreciation and limited exit opportunities.
This environment could deter new commercial real estate investment, impacting overall market recovery and urban revitalisation efforts.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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