Tung Chee-hwa, Hong Kong chief executive, 1937-2026
Political leader whose administration was buffeted by the Asian financial crisis, Sars epidemic and a contentious security bill
Hong Kong landlords and industry experts are blaming banks for exacerbating the city's shop market slump by being hesitant to provide commercial mortgages, even though property values have plummeted. Potential buyers are being denied financing, despite the residential market's recent growth, according to property tycoon Shih Wing-ching.
Banks typically show positive interest at first, but financing becomes challenging during the approval phase, he said. Raymond Ho, leader of advocacy group Momentum 107, pointed out that falling shop prices have rapidly depleted the pool of available capital, dampening investment and consumption. Banks are pressuring owners to pay back loans while simultaneously refusing to lend to new buyers, which discourages both users and investors, creating a vicious cycle.
Raymond Tsoi Chi-chung, founder of Asia Property Agency, noted that commercial mortgage lending is only 20% of its peak level, with many loan-approval department staff failing to secure even a single shop loan recently. Some shop investors, primarily business owners who leveraged their properties during the boom, are now facing severe financial distress, including selling luxury homes.
The financing crisis follows years of retail-property market weakness, with monthly transactions dropping to about 60 from a peak of 600, and shop prices falling over 40% from their 2018 high. The issue extends beyond property owners, with neighbourhoods like Kowloon West experiencing unusually high vacancy rates. Tony Kwok Tak-leung, chairman of the Guangdong Hong Kong Macau Greater Bay Area General Chamber of Real Estate, criticized banks for their negative stance on loans, even when borrowers have collateral, calling it absurd.
John Wong, president of the Federation of Hong Kong Brands, emphasized the mismatch between shop values and rents, with landlords offering concessions like rent-free periods and renovation subsidies. Industry representatives are urging banks to increase loan-to-value ratios, speed up approvals, and use more objective valuations, while urging banks to evaluate loan requests individually.
They believe that without recovery in commercial and retail properties, Hong Kong's economy won't recover either.
Written by urgent.news from South China Morning Post - Hong Kong's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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