30th October 2026 – (Hong Kong) The Hong Kong Monetary Authority said its end‑September 2026 survey estimated 3,819 residential mortgage loans in negative equity, down from 4,356 at end‑June. These cases were mainly linked to bank staff housing loans or mortgages under insurance programmes, which typically carry higher loan‑to‑value ratios. The aggregate value of negative equity mortgages declined to HK$17.3 billion from HK$19.6 billion over the same period, while the unsecured portion fell to HK$0.8 billion from HK$0.9 billion. The three‑month delinquency ratio for such loans edged up to 1.34 per cent from 1.25 per cent as the total value of negative equity loans contracted faster than the value of delinquent accounts.
The authority noted that the figures cover first‑mortgage loans provided by authorised institutions that are known to be in negative equity, defined as outstanding loan balances exceeding the current market value of the mortgaged property. Loans tied to co‑financing schemes are excluded because lenders do not keep records of second‑mortgage balances; therefore, the extent of negative equity in such cases is unknown. The surveyed institutions’ mortgage books represent about 99 per cent of industry total, and the results were extrapolated to reflect the banking sector as a whole.
In a separate release on the residential mortgage market for September 2026, the authority said mortgage applications fell by 10.5 per cent month on month to 7,560. Approved loans eased by 1.1 per cent from August to HK$31.8 billion, with primary‑market financing down 6.8 per cent to HK$8.5 billion and secondary‑market financing down 5.7 per cent to HK$14.4 billion, while refinancing rose 14.6 per cent to HK$8.9 billion. Loans drawn down in September dropped 22.8 per cent to HK$25.3 billion.
Pricing trends showed the share of new mortgages referenced to HIBOR decreasing to 52.7 per cent in September from 57 per cent in August, while those priced against best lending rates slipped to 1.3 per cent from 1.9 per cent. The outstanding stock of mortgage lending inched up by 0.2 per cent to HK$1,980.3 billion at end‑September. The overall mortgage delinquency ratio remained low at 0.11 per cent, and the rescheduled loan ratio was unchanged at nearly 0 per cent.
