Sun Hung Kai Properties Ltd (新鴻基地產), Hong Kong’s largest developer by market value, is offering mortgages worth as much as 120 percent of a home’s value at one of its projects as sales have slumped in the territory.
To qualify, buyers at Park Yoho Venezia in the territory’s Yuen Long District must already own another property pledged as security, according to sales information on the development’s Web site.
A spokesman for Sun Hung Kai confirmed the offer, which was earlier reported by the South China Morning Post.
The company’s financing scheme is aimed at attracting buyers in a market that has seen a correction of more than 13 percent since prices peaked in September last year. It is also a way to circumvent cooling measures by the Hong Kong government that restrict traditional bank mortgages on properties costing less than HK$10 million (US$1.29 million) to 60 percent of their value.
“Overall property developers are very aggressive and trying to offload inventory, because the outlook of the Hong Kong property market is not looking good,” Australia & New Zealand Banking Group Ltd senior economist Raymond Yeung (楊宇霆) said by telephone.
Though it is not alone, Sun Hung Kai’s initiative is so far among the most generous offers from developers to entice buyers. Henderson Land Development Co (恒基兆業地產), Kowloon Development Co (九龍建業) and Cheung Kong Property Holdings Ltd (長江實業地產) started offering financing of up to 90 percent last year as prices started to decline.
Sun Hung Kai shares yesterday fell 2 percent to HK$87.75, the lowest since May 26.
On the Hong Kong bourse, developers had the second-biggest drop as a group on the benchmark Hang Seng Index, with all 10 constituents in the property gauge down.
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