The Hong Kong Monetary Authority announced today the results of its latest survey on residential mortgage loans (RMLs) in negative equity.
The estimated number of RMLs in negative equity decreased to 1,307 cases at end-June 2016 from 1,432 cases at end-March 2016. These cases were mainly related to RMLs under mortgage insurance programme and bank staff housing loans.
The aggregate value of RMLs in negative equity decreased to HK$4,452 million at end-June 2016 compared with HK$4,919 million at end-March 2016.
The unsecured portion of these loans decreased to HK$157 million at end-June 2016 from HK$195 million at end-March 2016.
Since the first quarter of 2011, there have been no RMLs in negative equity with delinquencies of more than three months.
It is important to note that the figures derived from this survey relate only to RMLs provided by authorized institutions on the basis of first mortgages and which the reporting institution knows to be in negative equity (i.e. the outstanding loan amount with the reporting institution exceeds the current market value of the mortgaged property). Not included in these figures are RMLs associated with co-financing schemes which would be in negative equity if the second mortgages were taken into account. The extent to which such RMLs are in negative equity is not known because authorized institutions do not maintain records on the outstanding balances of the second mortgages.
The mortgage portfolio of the surveyed authorized institutions represents about 99% of the industry total. The survey results have been extrapolated to approximate the position of the banking sector as a whole.
Hong Kong Monetary Authority
29 July 2016