C’s point of view｜Sooner or later banks will provide “touch-and-go” mortgages
After the government completely withdraws the stimulus, not only investors can enter the market, but also short-term speculators can enter the market without having to pay punitive stamp duties. Some people are worried that this will lead to a resurgence of speculation, and even “moochao” that has disappeared for some time will reappear.
The so-called “touching goods” refers to the act of reselling properties for profit as a confirmor. In the early years (still during the British rule), Hong Kong society did not hate people who speculated in the real estate market as much as it does today; the government also gave them certain preferential treatment in tax regulations. As long as the buyer of the building can find a buyer with exactly the same conditions before the closing date, the reseller in the middle will not have to pay stamp duty, and the buyer will only need to pay normal stamp duty. The cost of using an intermediary certifier to “touch the goods” is very low, and it was once very popular.
Later, property prices in Hong Kong rose sharply, and many people complained about the difficulty of getting onto the property. The government then pointed the finger at speculators, saying that property prices rose so rapidly because of rampant “fixing.” Therefore, the person who resells in the middle also has to pay a printing fee, which deviates from the principle that printing fees are only levied on new owners.
At the same time, Hong Kong society has gradually regarded people who speculate in real estate as confirmors as bad people and destroyers of a healthy market. As a result, although the government has announced a complete withdrawal from the epidemic this time, it has not restored the old practice of not paying stamp duty for “touching goods”; even banks have immediately stated that they will not provide mortgages for “touching goods”.
I think the bank’s choice is simply pretentious and unnecessary. In fact, the person who needs to take out a mortgage is not the speculator who serves as the middle confirmer, but the buyer who finally takes over the title. He is most likely an innocent user. He was not willing to let the speculators make him a price difference. He just saw that this market was better than others and suited the needs of him and his family, so he did not hesitate to accept the “touch.” Could it be that what he did can be regarded as an act that harmed society, so that even if society wanted him to buy a house, he couldn’t borrow the money!
On the other hand, since the government has no intention of preventing speculators from entering the market and has canceled the additional stamp duty, why should banks deliberately weaken the effect of the government’s withdrawal? Furthermore, when banks make this type of mortgage, they lend the money to the ultimate buyer, not to intermediary speculators, which does not incur additional risks for the bank. As long as the ultimate buyer has a stable job and regular income that is enough to finance the property, the bank has no reason to refuse to do this type of business.
It is said that the happiest people are the finance companies after banks stopped doing “touch-and-go” mortgages. They usually don’t get such low-risk mortgage business, and now that banks don’t do it, the more they do, the better. It’s just that there haven’t been many cases of “touching goods” recently, and they haven’t really benefited yet. If financial companies really do a lot of “touching goods” business, banks will definitely not watch in vain as the business they should be able to do falls into the hands of competitors. Therefore, I believe that banks will resume the business of “touching goods” sooner or later. However, if there is no “touching goods” in the market, it will make no difference whether the bank does it or not.
