Negative equity cases in Hong Kong’s real-estate market hit a new high, according to official data released on Wednesday, as elevated interest rates continued to weigh on property prices.
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The number of homes whose value sank below what their owners were paying for their mortgages rose 6.1 per cent to 40,741 cases in the first quarter from the preceding period, data from the Hong Kong Monetary Authority (HKMA) showed.
The tally was the highest on record since the fourth quarter of 2003, according to mortgage brokers. The value of the negative equity cases rose by 5.5 per cent to around HK$205.9 billion (US$26.5 billion). It was also the second-highest value of negative equity cases since the HK$207.5 billion that was recorded in the third quarter of last year.
“Residential property prices fell 1.7 per cent during the period and the increase in negative equity cases was expected,” a HKMA spokesman said.
“The asset quality of the banking sector’s residential mortgage loans remains good,” the spokesman said. “By the end of March 2025, the overall mortgage loan delinquency rate was only 0.13 per cent and the delinquency rate of negative asset cases was only 0.17 per cent, maintaining a low level. This reflects that the vast majority of mortgage loan borrowers can repay on time and the risks of bank mortgage businesses are controllable.”
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Hong Kong’s lived-in home prices declined 0.49 per cent in March, according to an index published by the Rating and Valuation Department on Monday, following a 0.56 per cent decline in February. The index had retreated by 1.7 per cent as of the end of the first quarter to a level last seen in July 2016.
The falling home prices were attributed to caution among homebuyers amid a trade war between the US and China and uncertainty about the path forward for global interest rates.