One-month interest rates climbed through 1% for building news
The end of the year effect coupled with market expectations US rate hike in December is imperative. Hong Kong bank HIBOR continued to rise. The one-month interest rate peg to the mortgage interest rate rose for 5 trading days, even more since 2008 For the first time since December, it surpassed the 1% level at 1.00304%, up 0.04197% from Tuesday’s (28th) day and up 0.65% (1.85 times) from the mid-year low. Some analysts believe that one-month rate hikes may rise to 1.2% by the end of the year, which means the burden on the public for housing increases.
In recent years, many homeowners choose to make mortgages, the majority choose to use HIBOR. According to the figures released by the HKMA, the proportion of newly mortgaged H-shares in September was 93.4%, down slightly from 95.4% in August. Since H is mostly linked to 1-month HIBOR, as mortgage interest rates rise, monthly expenses for mortgage repayments will increase correspondingly. However, H generally capped interest. The current cap is at the best lending rate (P = 5.25%) minus 3.1%, equivalent to 2.15%.
By 500 million for cumulative increase thousand yuan
For example, the unit price of 10.95 million yuan for the newly completed unit of the three-bedroom apartment in City One, Shatin, is assumed to be 50% of the total H-plus 1.3% mortgage loan provided by the bank. The repayment period of 30% To H by the top capped 2.15%, the monthly repayment of 20,650 yuan, total period of the total interest expenses 1,958,800 yuan. In May this year, one-month HIBOR had seen a low of 0.35%. That is, H actually made about 1.65% of interest according to the plan. If we compare the two, we have to pay 1,358 yuan more every month. The total interest rate for the entire period has increased by nearly 490,000 yuan, up by 7% and 33.3% respectively. However, in the case of the H-Loan project built in the early years, there was still some room to rise for the expenditure on the property ceiling as a result of the lower interest rate attached or the interest rate on interest rates locked.
HIBOR next month up to 1.2%
Shanghai Commercial Bank Treasury Department Director Lin Junhong Research Institute, said the rise in interest rates reflect the market expected the Federal Reserve will raise interest rates next month, plus is now the end of November, 1 month interbank borrowing funds will cover the end of this year, at the end of the year effect Under the market demand for funds will be more ardent, these capital needs mainly from Chinese banks.
In addition, the recent strong trading in Hong Kong stocks, foreign institutions for the next 1-3 months of confidence in the performance of Hong Kong stocks, the need to exchange more Hong Kong dollars into the market, also led to higher interest rates. He expects the rate hikes will continue to rise by the end of this year, that is, one month before the rate hikes may reach 1.1% to 1.2% in one month. He added that the year-end effect will not be alleviated until the second week of January next year, when the interest rate hike is expected to come down.
In addition, Lin Chun-hong pointed out that there is still a balance of $ 180 billion in the banking system in Hong Kong. Even if the Federal Reserve increases its interest rates separately in December and March this year, it may not follow Hong Kong or even increase it by the third quarter of next year Discount rates. It is expected that the interest rate hike will be on the rise now that Hong Kong may raise interest rates by next year.
DBS estimates the next quarter plus P interest rates
However, Zhang Jiansheng, director of DBS Hong Kong’s corporate and institutional bank, believes that if interest rates continue to rise, the interest rate in Hong Kong will have upward pressure. Among them, medium and small banks are under pressure to raise interest rates.
On the other hand, next year there are more than just a giant IPO fund-raising, together with the United States so that if the flow of capital through tax cuts, will have an impact on liquidity in Hong Kong, estimated that the prime rate at the end of the first quarter of next year the fastest transfer by 0.25%. Zhang added that the United States is expected to raise interest rates three to four times next year, each plus 0.25%, due to the slow pace and the business has been expected, I believe little impact on Hong Kong’s economy.
International Monetary Fund (IMF) report pointed out that the current interest rate difference between Hong Kong and the United States is not the most wide, Hong Kong interest rates may rise sooner or later. Although higher than Hong Kong interest rates may lead to the outflow of capital in Hong Kong, the capital-raising depends on a number of factors such as asset prices, market risks and liquidity. It is uncertain whether the rate hike by the United States will make Hong Kong’s capital flow away.