Hong Kong is relaxing its mortgage rules for homes under construction, as the government takes further steps to support the city’s property market that’s been weighed by high borrowing costs.

Eligible first-time home buyers can now pay just 10% down payment for properties under construction with values of up to HK$10 million ($1.3 million), Hong Kong Mortgage Corp. subsidiary said in a statement late Friday. Previously, buyers of such properties valued over HK$6 million could only obtain 70% loan-to-value ratio, resulting in higher down payment requirements.

The adjustment will help boost sentiment in the first-hand property market, where developers have been under pressure to cut prices to accelerate sales. CK Asset Holdings Ltd., a leading developer owned by Li Ka-shing, last month priced its new project at a seven-year low.

While the move will hand more purchasing power to new home buyers, it won’t boost the overall property market unless the government relaxes the stress test requirement, said Sammy Po, chief executive officer of the home division at Midland Realty. Buyers currently must go through a stress test that ensures their income can afford future rate rises if they take on mortgages.

“Simply relaxing mortgages on unfinished properties is not targeting the problem,” Po said. He expects home values to drop 2% to 3% for the full year if the government doesn’t roll out more measures.

Just two months earlier, the government loosened its mortgage rules for the first time since 2009, allowing buyers to purchase apartments with lower down payments. Expensive interest rates have deterred buyers in one of the world’s most expensive property markets, bringing down home prices down 17% from their peak in 2021.

Other changes for the mortgage program: