Hong Kong Mortgage Approvals Rise 10.1% in May, HK$40.2B Approved

The Hong Kong Monetary Authority (HKMA) reported a 10.1% month-on-month increase in residential mortgage approvals for May 2026, reaching HK$40.2 billion. The data suggests continued stabilization in the city’s real estate market, which has been gradually rebounding after a prolonged correction.

Mortgage applications surged 12.8% to 10,767 in May, while loans drawn down rose 4.3% to HK$23.6 billion. Refinancing activity showed the largest month-on-month jump, climbing 17.7% to HK$4.7 billion, while loans financing primary and secondary market transactions grew 9.4% and 9.1%, respectively, hitting HK$11.7 billion and HK$23.8 billion.

Despite rising activity, the proportion of new loans priced with reference to the Hong Kong Interbank Offered Rate (HIBOR) declined from 77.8% in April to 73.8% in May. Loans tied to best lending rates also dipped slightly, from 1.3% to 1.2%. Meanwhile, the outstanding value of mortgage loans increased by 0.4% to HK$1.9469 trillion. Risk indicators remained strong, with a mortgage delinquency ratio of just 0.11% and a rescheduled loan ratio near zero.

The latest figures reflect strengthening demand in Hong Kong’s housing market, fueled by improving sentiment and expectations of interest rate cuts. Analysts at CBRE and Knight Frank have projected 3%–8% home price growth in 2026, citing favorable conditions such as increasing transaction volumes and reduced borrowing costs, which could fall below 3% later this year. However, unsold inventory—estimated at 12,000–13,000 units as of early 2026—continues to weigh on price recovery.

May's data follows an already robust start to the year. Mortgage applications in March surged 26.9% month-on-month, while approvals grew 38.6%. The private residential property price index has also shown consistent growth, rising for nine consecutive months through February 2026, with cumulative gains of approximately 8% from the recent trough.

Hong Kong’s residential market appears to be on firmer footing, but structural challenges like housing supply and inventory overhang remain. Investors and stakeholders will be closely watching mortgage activity and transaction data in the coming months for further signs of sustained recovery.