2023-10-06 23:26:03
A Novo Land owner was suddenly “called for a loan of NT$5 million by the bank, otherwise the property would be repossessed.” The incident aroused great repercussions, and it was believed that the downturn in the property market would cause the bank to “take back money.”
The hot topic in the city’s property market recently is that an owner of Novo Land in Tuen Mun only passed the stress test when he bought the property. Now he was suddenly “called for a loan” of NT$5 million by the bank, otherwise the property would be repossessed. This incident has caused great repercussions, and it is believed that the property market is under downward pressure. The bank “collects water”; in fact, call loans involve costs such as administration and property auctions, and multiple factors need to be considered, otherwise the bank will lose more than it gains at any time.
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The stress test is just a matter of being called for a loan at any time.
Recently, an owner asked for help on the housing owner’s Facebook communication page, saying that he suddenly received a letter from the bank “call loan” for repayment, requiring him to find a new mortgage guarantor or to repay the mortgage loan and interest within 30 days. It is estimated that about five million yuan was involved. He had no choice but to try to sell the unit on Facebook. He pointed out that if he really sold the property through an auction house, he would have to sell the property at a “discount” and be responsible for the related expenses. Therefore, “you may not have any money left if you sell the unit.” ”. The owner emphasized that he had paid on time, but some netizens pointed out that the incident was not simple and suspected that there was a problem with the owner’s past credit record. The owner further explained that he only passed the stress test when applying for a mortgage, and later the rise in interest rates put him in trouble.
In response to media inquiries, Dah Sing Bank, which undertakes flat mortgages, stated that under normal circumstances it would never ask customers to repay mortgage loans early. The above-mentioned case is the only one in recent years and is indeed very special and rare. It emphasized that it is related to macroeconomic and market conditions. Nothing to do. The owner has now deleted the post.
The owner said he received a letter from Dah Sing Bank, requiring him to find a loan guarantor or to repay the mortgage loan within 30 days. (Facebook picture)
SARS negative equity reached a new high in 2003
When it comes to bank call loans, people will naturally think of the period from the 1997 financial crisis to the SARS epidemic in 2003. At that time, many Hong Kong people believed in the economic myth that property prices would only rise but not fall. However, during the 1997 Asian Financial Crisis, property prices were at A sharp drop of 30% to 50% in one year caused many properties to be priced below the mortgage loan amount and became “negative equity”. Coupled with the rising unemployment rate, many owners were unable to make payments. As a result, banks confiscated the properties and then let the “banks” The main property was auctioned in the market and cashed out, so some owners committed suicide.
The problem of negative equity reached a historical peak during the SARS period in 2003. That year, the worst-hit area of Amoy Gardens recorded a flat price of NT$550,000 for a 322-square-foot unit. According to data from the Hong Kong Monetary Authority, the number of negative equity mortgages in June 2003 reached 105,000, accounting for 22% of the total number of mortgages in Hong Kong. The amount involved was as high as 165 billion yuan. The average property depreciation was about 28%. The unsecured mortgage portion on the market was about 360%. 100 million, it would take more than ten years for many housing estates to return to their pre-SARS highs, and it would take until the fourth quarter of 2016 for the number of negative equity cases to fall to zero.
However, the property market has been weak in recent years, and the phenomenon of negative equity has reappeared. At the end of the second quarter of this year, there were 3,341 residential negative equity cases. Although it was nearly half the number in the first quarter, market participants are not optimistic about the market outlook. Meridian Mortgage said that the property market will start in the second quarter of this year. Transaction prices and volume both fell. Coupled with interest rate hikes in Hong Kong and the United States, the number of negative equity cases is expected to rise to 6,000 in the third quarter. Jones Lang LaSalle is even more pessimistic and believes that the number of negative equity cases will rise above 10,000. Zong.
The problem of negative equity reached a historical peak during the SARS period in 2003. That year, the worst-hit area of Amoy Gardens recorded a flat price of NT$550,000 for a 322-square-foot unit. (PETER PARKS/AFP via Getty Images, file photo)
Bank repossession auction may not be able to recover the entire loan
Of course the owner does not want to be called for a loan, but is it necessarily beneficial to the bank to call the loan? Although according to the mortgage contract, the bank has the right to require the owner to repay early at any time, but there are not many owners who can immediately repay millions or even tens of millions, and the silver master project may not be sold at a good price at the auction. Failure to recover the arrears results in bank bad debts, which involves a lot of administrative and time costs. On the other hand, once a bank gives the public a tough impression that it often calls loans, mortgage applicants will also become wary. Therefore, the bank will evaluate the owner’s repayment ability and attitude before making a decision on whether to call a loan.
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