HK 3Q mortgage loans in negative equity down 51%

HONG KONG: Hong Kong's residential mortgage loans (RMLs) in negative equity were estimated to have decreased 51% to 152 cases by end-September from 310 cases at the end of June, data from the Hong Kong Monetary Authority showed.

The aggregate value of RMLs in negative equity fell to HK$200 million (RM80.08 million) as at the end of September, from HK$500 million in June.

The unsecured portion of these loans stood at around HK$100 million.

The loan-to-value ratio of the RMLs in negative equity rose to 138% at the end of the third quarter, from 122% in the previous quarter.

The three-month delinquency ratio of mortgages in negative equity increased to 0.93% from 0% in the second quarter.

Loans in negative equity means that the outstanding loan amount exceeds the market value of the mortgaged property.

Hong Kong's property market faces overheating worries, with housing prices rising almost 50% since the start of last year due to demand from mainland Chinese and low interest rates that largely track US monetary policy, as the Hong Kong dollar is pegged to the US currency.

The Hong Kong government has unveiled some measures this year to help curb escalating property prices and pledged to increase housing supply. — Reuters