Tuesday, August 4, 2020
Martin Hennecke

Lenders fret as building values fall 30pc
Commercial lenders in Hong Kong say they are concerned about a 30 percent drop in building values over the past 12 months and will consider calling in or restructuring loans if values fall much further. If the lenders call loans or further tighten the lending requirement, a new round of commercial property sell-off may be triggered. Hong Kong property prices fell 4.2 percent in the first half, but still topped the world with a price of US$4,440 (HK$34,632) per square foot, according to Savills, which added that SAR's decline was the fifth greatest out of the 28 cities tracked and the most in Asia. In the secondary market, the owner of a 534-sq-ft property at St Barths in Ma On Shan lost at least HK$1.06 million after selling it for HK$9.8 million. The sale will incur 10 percent special stamp duty. In the primary market, Sun Hung Kai Properties (0016) was oversubscribed by 23 times for its 54 units at Regency Bay in Tuen Mun yesterday. The second batch of sales launches today and a featured flat will be sold by tender. Meanwhile, there were two more forfeiture cases at Solaria in Tai Po, involving losses of HK$2.66 million. JLL Hong Kong expects the sale of many first-hand properties will be delayed, and that the residential transaction volume will drop significantly in the short term. And mReferral Mortgage Broker and Centaline Mortgage both expect the one-month Hong Kong Interbank Offered Rate to fall to 0.2 percent, this year after the US Federal Reserve said it would keep the rate near zero. The one-month Hibor was up yesterday to 0.25536 percent.

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