The Hong Kong Monetary Authority published the results of its survey on residential mortgage loans in negative equity at end-March 2026, showing a sharp fall in both the number and value of affected loans. The estimated number of cases dropped 46.4% from end-December 2025 to 11,424, while the aggregate value declined 47.8% to HKD55 billion. The unsecured portion fell to HKD2.8 billion from HKD6.2 billion. These cases were mainly bank staff housing loans or residential mortgage loans under the mortgage insurance programme, which generally have higher loan-to-value ratios. The three-month delinquency ratio on residential mortgage loans in negative equity remained low at 0.5% at end-March 2026, compared with 0.31% at end-December 2025. The figures cover only residential mortgage loans provided by authorized institutions on the basis of first mortgages and known by the reporting institution to be in negative equity. They exclude loans under co-financing schemes that would be in negative equity if second mortgages were included, because authorized institutions do not maintain records of those outstanding second-mortgage balances. The surveyed institutions account for about 99% of the industry's mortgage portfolios, and the results were extrapolated to estimate the position of the banking sector as a whole.

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