The impact of new government policies on the property market
The positive news brought to the property market by the "removal of hot-ticket measures" has long faded, and the further rescue measures that the market has been waiting for have finally been announced in the government's new "Policy Address." The most eye-catching part is the relaxation of the mortgage loan-to-value limit to 70%. For novice buyers who are not familiar with home buying, there are indeed many questions. After the "Policy Address" was released, many local developers have successively announced Most of them seem to be optimistic about the future development of the property market by increasing the price of their new projects. What is the significance of relaxing mortgages this time? Let the author share it with readers.
Impact of new policies on novice buyers
- Novice buyers may be confused by the policy of relaxing the mortgage loan-to-value ratio limit and need more explanation and guidance.
- In response to the introduction of new policies, local developers have increased prices for new projects, showing their confidence in the property market.
The significance of relaxing mortgage ratios
The significance of relaxing the upper limit of mortgage ratio on the real estate market is to increase the purchasing power of buyers, help stimulate transaction activities in the real estate market, and promote market activity. At the same time, it will also help developers launch more new projects to meet market demand and promote the development of the property market.
Conducive to investment and property exchange
After property prices began to adjust from high levels in recent years, the government has successively introduced a variety of measures to benefit the property market, many of which are related to mortgages. For example, it has relaxed the mortgage loan ratio, covered high loan ratio mortgages to first-hand uncompleted properties, and relaxed high loan ratios under conditions. Restrictions on percentage mortgage rental of self-occupied properties and removal of hot taxes, etc.
The main beneficiaries are investors
In this "Policy Address", the residential mortgage loan ratio has been uniformly adjusted to an upper limit of 70%, which is even more special. The main "beneficiaries" can be said to be mainly investors. The reason is that young buyers may have limited funds. In the past, the main problems they faced were around the number of first-time buyers, such as whether it is more advantageous to buy in the name of a single person or jointly. However, after the mortgage ratio has been relaxed to 70% this time, passengers basically no longer need to worry about whether to retain their "first-time homebuyer" status, because almost "everyone is equal" and can enjoy a mortgage of up to 70%, as long as the payment and The income ratio is 50%.
Benefits for investors and property buyers
For investors or property buyers, this relaxation of measures is most beneficial to them. Before the relaxation, people with mortgages would be subject to restrictions on both the mortgage loan-to-value limit and the payment-to-income ratio. This is one of the reasons why buyers want to use their first home spot as soon as possible.
Additionally, previously if a property owner wanted to rent out a property, they needed to meet mortgage-to-mortgage requirements in order to legally rent it out. Now, the mortgage ratio is unified at 70%, which means that buyers only need to pay 30% of the down payment, or reduce the remaining payment to 70% or less, before they can legally rent the property. This indirectly lowers the threshold for landlords to rent out, making it easier than before.
Impact on market bears
For those who are bearish on the market outlook, basically they will not take action easily if the market sentiment does not improve significantly in the short term. However, for investors, most of them pursue long-term stable returns. Now that property prices have fallen to a certain extent, and with interest rates expected to gradually decrease in the future, relaxing mortgages will be an incentive for them to enter the market, which will help stimulate transaction volume in the property market in the short term.
Property market sentiment is improving
As long as the transaction volume picks up, the property market sentiment will improve. I believe developers are also optimistic about this and have successively announced price increases for new projects.
Discussion on MPF entering the market to buy property
In addition to relaxing the mortgage loan-to-value ratio, there have been many voices discussing the idea of allowing Mandatory Provident Fund funds to enter the market for property purchases.
Policy "green light"
In the past, when the property market was booming, the government was afraid that it would be too late to suppress property prices, making it difficult for relevant discussions to take place. However, Chief Executive Li Ka-chiu has played the "open card" and will continue to study ways to use Mandatory Provident Fund (MPF) to buy properties. It can be said that the policy has been "green lighted".
exciting news
This is exciting news for people who have accumulated a certain amount of Mandatory Provident Fund funds, or for young people who are in need of a property purchase ladder. It is also expected to bring the sluggish property market back on track.