Timothy Morano
Jan 30, 2026 09:08
HKMA experiences destructive fairness mortgage circumstances fell to 21,304 in This autumn 2025, down from 31,449, signaling Hong Kong property market restoration after stamp responsibility removing.
Hong Kong’s underwater mortgage disaster is easing sooner than anticipated. The Hong Kong Financial Authority reported destructive fairness residential mortgage loans dropped to 21,304 circumstances at end-December 2025, a 32% decline from 31,449 circumstances simply three months earlier.
The combination worth of those troubled loans fell much more sharply—right down to HK$105.4 billion from HK$156.8 billion in September, representing a 33% quarterly discount. The unsecured portion, which represents precise financial institution publicity, contracted to HK$6.2 billion from HK$10.9 billion.
Regardless of the development, delinquency charges ticked up barely. The three-month delinquency ratio rose to 0.31% from 0.24% in September—nonetheless remarkably low by international requirements and nicely under the sector-wide 0.11% charge recorded in December 2024.
Coverage Tailwinds Driving Restoration
The turnaround follows aggressive authorities intervention. Hong Kong eliminated all further stamp duties in February 2024 to revive its struggling housing market, whereas the HKMA standardized most loan-to-value ratios at 70% for many residential properties in October 2024.
These measures look like working. Mortgage loans accredited jumped 5.4% month-on-month to HK$25.5 billion in December 2024, and the common mortgage ratio hit 63.2% in February 2025—the very best stage in over 15 years.
Falling rates of interest are serving to too. HSBC’s Hong Kong Greenback Finest Lending Charge dropped to five.00% by October 2025, down from 5.625% in September 2024. About 91% of recent mortgages at the moment are priced off HIBOR slightly than prime charges.
Caveats Value Noting
The HKMA flagged an essential limitation: these figures solely seize first mortgages the place banks know the mortgage exceeds property worth. Second mortgages below co-financing schemes aren’t included, that means the true destructive fairness image could possibly be worse.
Nonetheless, the development course is obvious. With HK$1.87 trillion in excellent mortgage loans throughout the sector, the destructive fairness portion now represents simply 5.6% of the whole—down from over 8% in Q3.
For crypto merchants watching conventional finance stress indicators, Hong Kong’s property market stabilization removes one potential supply of systemic danger in Asia’s premier monetary hub. The town’s Web3 ambitions rely partly on broader financial well being, and this knowledge suggests the inspiration is firming up.
Picture supply: Shutterstock