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Nisha Gopalan and Andy Mukherjee

Nobody's Scared of Hong Kong's Mortgage War

Lenders' low funding costs mean they can afford to compete for home buyers.

The mortgage war in Hong Kong, the world's most unaffordable housing market, is getting intense. But instead of panicking, investors in HSBC Holdings Plc should be looking to uncork the champagne.

Frequent attempts by the government to cool an overheated market have brought transactions in pre-owned homes to a standstill. New launches, though, are still abundant as developers clear inventory. And to help hapless buyers suspend their disbelief as they write million-dollar checks for shoebox-sized apartments, lenders are coming up with what look like giveaway rates.