FS urges homebuyer prudence

2017-06-15 00:02:24

Prospective homebuyers should be prudent in assessing their ability to repay mortgage loans amid a potential US interest rate rise.

Financial Secretary Paul Chan made the statement to the media today, saying the property market has shown signs of irrational exuberance.

He said the US is very likely to raise its interest rate this week and rate hikes will continue into 2019.

He said the interest rate hike cycle will have a negative impact on property prices.

"The fundamentals of the property market have been changed, both in terms of supply and in terms of interest rates. Because of the interest rate normalisation in the US, we expect mortgage interest rates will go up.

"Although the increase in mortgage interest rates may not be immediate, but the trend is quite clear."

He urged potential homebuyers to assess their affordability when deciding to purchase their home.

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