Negative equity home loans jump to 384Business | 29 Apr 2020 6:33 pm
The number of residential mortgage loans in negative equity has more than doubled to 384 cases at end-March from 128 at the end of last year, a survey by the Hong Kong Monetary Authority showed.
These were related to bank staff housing loans or RMLs under mortgage insurance programs, which generally have a higher loan-to-value ratio, said the HKMA.
The aggregate value of RMLs in negative equity increased by 1.44 times to HK$1.87 billion at end-March from HK$764 million at the end of last December.
The unsecured portion of these loans increased to HK$81 million ended March from HK$25 million at end-December 2019.
The mortgage portfolios of the surveyed authorized institutions represent about 99 percent of the industry total.
The survey results have been extrapolated to estimate the position of the banking sector as a whole, said the HKMA.
Wong Leung-sing, associate director of research at Centaline Property Agency predicts that secondary home prices will recover this quarter and the Centa-City Index would reach nearly 180 points, which could help the RML cases drop to or below 100 during this period.