In 2022, property prices in Hong Kong will fall by 15.59% for the whole year, the largest annual decline since 1998.
Property prices fell, and the number of cases of negative equity rose sharply.
The Hong Kong Monetary Authority announced today (31st) that by the end of the fourth quarter of 2022, the number of negative equity residential mortgage loans increased sharply to 12,164. The largest number of cases of negative equity.
The number of negative equity accounts for the overall number of residential mortgage loans rose to 2.1% from 0.09% in the third quarter of last year; the total amount of outstanding loans involved increased from 3.006 billion yuan to 66.252 billion yuan, an increase of 21 times, accounting for outstanding The percentage of total loans is 3.66.
The HKMA pointed out that the number of residential mortgage loans in negative equity increased from 533 at the end of the third quarter of 2022 to 12,164 at the end of the fourth quarter of 2022.
These cases involved residential mortgage loans or loans under the Mortgage Insurance Scheme for bank staff, and the LTVs for such loans are generally high.
The amount of the unsecured portion of residential mortgage loans in negative equity increased from HK$59 million at the end of 3Q22 to HK$2,517 million at the end of 4Q22.
The amount involved rose to 66.25 billion yuan
Since the first quarter of 2011, banks have not recorded any residential mortgage loans in negative equity that are more than 3 months in arrears.
It must be noted that the figures obtained in this survey only refer to primary mortgage loans provided by banks that are known to be in negative equity (that is, the outstanding loan amount owed to the interviewed institutions exceeds the current market value of the mortgaged property), and does not include secondary mortgage loans. And together with the second mortgage, it is a residential mortgage loan with negative equity.
Since banks do not have information on customers' outstanding loans on secondary mortgages, it is impossible to know how many of them are in negative equity.
The mortgage loans of the authorized institutions surveyed accounted for about 99% of the total mortgage loans of the entire banking system.
The findings were extrapolated to estimate the negative equity mortgage situation across the banking system.