Hong Kong’s Housing Market Rebounds: Negative Equity Mortgages Plummet by Mid-2025

Hong Kong’s property market shakes off the gloom as underwater mortgages dive.

### The Turnaround No One Saw Coming

Banks and homeowners breathe easier as negative equity loans—those pesky reminders of the 2023 crash—finally retreat. The HKMA won’t say it outright, but someone’s popping champagne in Central.

### How the Tide Turned

Strict lending reforms? Check. A speculative frenzy on mainland ‘safe-haven’ inflows? Probably. Either way, the numbers don’t lie—even if some mortgage brokers still do.

### The Ironic Twist

Funny how ‘risk management’ only becomes fashionable after the bloodbath. Meanwhile, crypto degens nod sagely from their BTC-backed loans.

The Hong Kong Monetary Authority (HKMA) has released its latest findings on residential mortgage loans (RMLs) in negative equity, highlighting a decrease in such cases by the end of June 2025. According to the HKMA, the number of RMLs in negative equity stood at 37,806 cases, a reduction from 40,741 cases recorded at the end of March 2025.

Decline in Negative Equity Cases

This decrease is primarily attributed to bank staff housing loans and mortgage insurance program loans, which generally bear a higher loan-to-value ratio. The total value of RMLs in negative equity was reported at HK$190.2 billion at the end of June, marking a decline from HK$205.9 billion in March.

Reduction in Unsecured Loans

The unsecured portion of these loans also saw a reduction, from HK$16.4 billion at the end of March to HK$14.3 billion by the end of June. Despite the reduction in loan values, the three-month delinquency ratio of RMLs in negative equity saw a slight increase, rising to 0.21% from 0.17%.

Survey Scope and Limitations

The survey covers RMLs provided by authorized institutions on the basis of first mortgages, which are known to be in negative equity. Notably, it excludes loans associated with co-financing schemes that might also be in negative equity if second mortgages were considered. The extent of negative equity in such cases remains undetermined, as financial institutions do not maintain records of second mortgage balances.

The mortgage portfolios surveyed represent approximately 99% of the industry total, allowing the HKMA to extrapolate the data to estimate the overall position of the banking sector. This comprehensive survey provides valuable insights into the state of the residential mortgage market in Hong Kong.

For more information, visit the Hong Kong Monetary Authority.

• hong kong
• negative equity
• mortgage loans