Hong Kong Monetary Authority Reports Decline in Negative Equity Mortgage Loans for June 2024

The Hong Kong Monetary Authority (HKMA) has released the findings of its latest survey on residential mortgage loans (RMLs) in negative equity for the end of June 2024. According to the HKMA, the number of RMLs in negative equity has decreased to 30,288 cases from 32,073 cases at the end of March 2024.

Decrease in Negative Equity Loans

The decline in negative equity cases is primarily attributed to bank staff housing loans and RMLs under the mortgage insurance programme, which typically have higher loan-to-value ratios. The total value of RMLs in negative equity has also dropped to HK$155 billion from HK$165.3 billion in the previous quarter.

Reduction in Unsecured Loan Portions

The survey further indicates that the unsecured portion of these loans has reduced to HK$10 billion by the end of June 2024, down from HK$11.2 billion at the end of March 2024. Despite the overall improvement, the three-month delinquency ratio of RMLs in negative equity slightly increased to 0.11% from 0.06% over the same period.

Limitations of the Survey

The HKMA clarified that the survey's figures only account for RMLs provided by authorized institutions based on first mortgages, where the outstanding loan amount exceeds the current market value of the mortgaged property. RMLs associated with co-financing schemes are excluded from these figures, as authorized institutions do not maintain records on the outstanding balances of second mortgages.

Industry Representation

The mortgage portfolios of the surveyed authorized institutions represent approximately 99% of the industry total. The survey results have been extrapolated to estimate the overall position of the banking sector in Hong Kong.

For more detailed information, the full survey results can be accessed on the Hong Kong Monetary Authority website.

Hong Kong Monetary Authority
31 July 2024