MReferral: Hong Kong's negative equity cases in Q3 hit a 13-quarter low, amount hits a 16-quarter low

According to the latest data released by the Hong Kong Monetary Authority, negative equity cases in the third quarter of 2026 were recorded at 3,819, involving an amount of HK$17.327 billion. Compared with the 4,356 cases and HK$19.621 billion recorded in the second quarter, the number of cases and the amount decreased quarter-on-quarter by 537 cases (12.3%) and HK$2.294 billion (11.7%) respectively. The number of cases hit a 13-quarter low, while the amount hit a 16-quarter low. Cao Deming, Chief Vice President of mReferral Mortgage Brokerage Services, said that the property market entered a consolidation phase in the third quarter, with property prices once experiencing a pullback. According to data from the Rating and Valuation Department, the private domestic price index stood at 320.1 in July, down about 1% from June, a mild decline. In addition, the number of buyers using higher mortgage ratios has decreased significantly in recent years. According to data from The Hong Kong Mortgage Corporation Limited, in the first nine months of this year, the number and amount of new mortgage insurance loans drawn were 4,433 cases and HK$23.738 billion respectively, compared with 5,411 cases and HK$26.747 billion in the same period last year, a decrease of 978 cases (18.1%) and HK$3.009 billion (11.2%) respectively. Both the number of cases and the amount hit lows for the first nine months in nearly 11 years and 9 years respectively. As property prices only experienced a brief pullback, and most homebuyers have reduced borrowing at maximum high mortgage ratios, they are less likely to fall into negative equity, causing negative equity cases to continue decreasing in the third quarter. Cao said that the private domestic price indices for the latest August and September have regained upward momentum, with property prices rising again. Coupled with interest rates remaining at a reasonable level, banks will maintain a positive attitude toward residential mortgage business. If property prices remain stable in the fourth quarter, there is still room for negative equity cases to decline. He continued that among negative equity cases, the delinquency ratio for mortgage loans overdue by more than 3 months was 1.34%. Although the ratio has risen, the actual number of cases has instead declined and remains at a low level, reflecting the robust repayment ability of Hong Kong property owners. On the other hand, given that the overall risk of residential properties is relatively controllable, major banks are more confident in mortgage business and will continue to launch different types of mortgage plans during the year, stepping up related incentives to attract quality customers, which is conducive to the healthy development of the mortgage market.