Following the Federal Reserve's decision to pass over on a rate rise last week, the Chief Executive of the Hong Kong Monetary Authority Norman T.L. Chan issued a statement to the media to alert Hong Kong property owners and potential buyers that the HKMA still expects a rise in the US rates.
In his statement Mr Chan commented that, “while the FOMC decided not to raise the policy interest rate last night, it is worth noting that 13 out of 17 members of FOMC expected a lift-off within this year. So it is important that we should not think that the ultra low interest rate environment will last indefinitely.
In terms of Hong Kong’s property market, the disconnect between the purchasing power of our citizens and the high valuation has become very serious for quite some time. With the recent slowdown of the Mainland and Hong Kong economies, it is important that buyers of property take into full account of the fact that the ultra low mortgage interest rates will not last forever.
They should carefully assess their income levels and repayment ability when they take out mortgage loans, so as to avoid running into financial difficulties when interest rates normalise and the property cycle turns.”
