Hong Kong's Negative Equity Mortgage Loans Decline in Q3 2025
Caroline Bishop Nov 01, 2025 09:23
The number of Hong Kong residential mortgage loans in negative equity decreased by 17% in Q3 2025, according to the Hong Kong Monetary Authority.
The Hong Kong Monetary Authority (HKMA) has released its latest survey results, indicating a notable decline in residential mortgage loans (RMLs) in negative equity as of the end of September 2025. The findings reveal a decrease from 37,806 cases at the end of June 2025 to 31,449 cases by the end of September, marking a significant reduction in negative equity cases.
Decrease in Aggregate Loan Values
The aggregate value of these RMLs in negative equity dropped to HK$156.8 billion, down from HK$190.2 billion at the end of June 2025. Meanwhile, the unsecured portion of these loans also reduced to HK$10.9 billion from HK$14.3 billion, demonstrating a positive trend in the mortgage market.
Delinquency Ratios Remain Low
The three-month delinquency ratio for RMLs in negative equity remained relatively low at 0.24% by the end of September 2025, compared to 0.21% at the end of June. This stability suggests a resilient mortgage sector despite the challenges of negative equity.
Survey Scope and Limitations
The HKMA's survey considers only the RMLs provided by authorized institutions based on first mortgages, where the outstanding loan amount surpasses the current market value of the property. It excludes RMLs linked to co-financing schemes, which might also be in negative equity if second mortgages were considered. The lack of records on second mortgage balances means the full extent of negative equity across all mortgage types remains unknown.
Industry Representation
The surveyed institutions represent approximately 99% of the total mortgage industry in Hong Kong. The HKMA has extrapolated the survey results to estimate the overall position of the banking sector.
For more detailed information, visit the Hong Kong Monetary Authority.
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