Hong Kong's de facto central bank on Friday relaxed mortgage rules for some properties – the first time since 2009 – to make them more affordable.

The Hong Kong Monetary Authority (HKMA) said the adjustments will take immediate effect.

Under the new arrangements, self-use residential homebuyers can now borrow up to 70 percent for flats worth below HK$15 million, as well as 60 percent for homes costing between HK$15 and HK$30 million.

But the maximum loan-to-value ratios for homes costing more than HK$30 million, as well as residential properties not bought for self use, will remain unchanged at 50 percent.

Meanwhile, the loan-to-value ratio for non-residential properties will also be increased to 60 percent.

The authority's chief executive, Eddie Yue, said the decision was made after careful consideration.

"Even with these adjustments, the Hong Kong banking sector has ample buffers to cope with any challenges from a sharp correction in property prices. Therefore, we consider that there is room to relax these measures," Yue said.

"I would take this opportunity to remind everyone that buying a property is a very important life decision. Prospective buyers should carefully assess their ability to afford to purchase a property and the financial risks involved."

Financial Secretary Paul Chan, for his part, said the adjustments are not "a prelude or variation to ease property cooling measures".

He wrote on his blog that the government is not considering relaxing cooling measures, adding that they will remain in place to combat short-term speculative activities and dampen investment demand.

Ho Lok-sang, the director of Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute at Lingnan University, said while the relaxation of mortgage rules is a "safe" move, he believes it will do little to stimulate property transactions.

The professor told RTHK that the government should instead abolish the special stamp duty (SSD) imposed on buyers who acquire a residential property and resell it within 36 months.

"The effect of the special stamp duty is even more damaging to housing transactions. Removing, abolishing the SSD is the right way, but the government so far has been reluctant to do that," he said.

"I don't think removing the SSD is going to make the housing market overheated. It's not likely to happen at all."
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Last updated: 2023-07-07 HKT 21:49