Number of residential mortgages in negative equity falls 12pc in September: HKMA

The number of residential mortgages in negative equity - where the loan is bigger than the value of the home - dropped by 12.3 percent to 3,819 cases in September, as home prices continued to rise, a survey by the city’s de facto central bank showed.

They accounted for just 0.62 percent of the total number of mortgage borrowers as of last month, according to the latest survey by the Hong Kong Monetary Authority.

The aggregate value of these loans also declined by 11.7 percent to HK$17.3 billion, or 0.87 percent of the outstanding mortgage loans.

The unsecured portion of the debts dropped from HK$922 million in June to HK$837 million in September.

These cases were mainly related to bank staff housing loans or mortgages under mortgage insurance programs, which generally have a higher loan-to-value ratio, the HKMA said in a statement on Friday. 

The three-month delinquency ratio of mortgages in negative equity, however, climbed to 1.34 percent from 1.25 percent in June

In a separate statement, the HKMA revealed that mortgage loans drawn in September decreased by 22.8 percent from August to HK$25.3 billion. 

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