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The percentage of monthly household income used for mortgage repayments in Hong Kong could reach 60.1%, the least affordable level since 1998, if mortgage rates rise to 3.5%, according to Bloomberg Intelligence.
That could deter buyers unless household incomes surge or home prices decline further, Bloomberg analysts Patrick Wong and Francis Chan wrote in a note on Thursday. For the ratio to remain at about 56%, current home prices need drop by at least 10%.
Hong Kong Monetary Authority Chief Executive Eddie Yue told reporters on Thursday that banks would “very likely” raise their deposit and lending rates by the end of the year as US interest rates continue to spike. HKMA lifted its base rate by 75 basis points to 3.5%, hours after the Fed’s move of the same magnitude.
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First Published: Thu, September 22 2022. 09:40 IST