The Hong Kong Monetary Authority (HKMA) published survey results showing a decline in residential mortgage loans in negative equity at the end of September 2026, alongside an increase in their three-month delinquency ratio. The estimated number of affected loans fell to 3,819 from 4,356 at the end of June 2026, while their aggregate value decreased to HKD 17.3 billion from HKD 19.6 billion. The unsecured portion of these loans declined to HKD 0.8 billion from HKD 0.9 billion. The three-month delinquency ratio rose to 1.34% from 1.25% because the aggregate value of mortgages in negative equity fell faster than the value of delinquent mortgages in that category. Affected loans were mainly bank staff housing loans or mortgages under the mortgage insurance programme, which generally have higher loan-to-value ratios. The estimates cover first mortgages provided by authorized institutions where the outstanding loan exceeds the property's current market value. They exclude loans under co-financing schemes that would be in negative equity only after taking second mortgages into account, as institutions do not hold records of those second mortgage balances. Surveyed institutions represent about 99% of industry mortgage portfolios, with results extrapolated to estimate the banking sector's position.
HKMA reports decline in negative equity mortgages to 3,819 as delinquency ratio rises
The Hong Kong Monetary Authority's survey estimated 3,819 residential mortgages in negative equity at the end of September 2026, down from 4,356 at the end of June, with their aggregate value falling to HKD 17.3 billion from HKD 19.6 billion. The three-month delinquency ratio increased to 1.34% from 1.25% because the value of all mortgages in negative equity declined faster than the delinquent portion. The estimates exclude loans that would be in negative equity only after accounting for second mortgages under co-financing schemes.