H
ong Kong's real-estate market has seen a significant spike in negative equity cases, with 40,741 homes now valued below their mortgage payments. This represents a 6.1% increase from the previous period and the highest number on record since 2003. The total value of these cases also rose to around HK$205.9 billion (US$26.5 billion), the second-highest amount ever recorded.

    The decline in property prices, which fell by 1.7% during the quarter, was expected given the current economic climate. Mortgage brokers note that this has led to a record number of negative equity cases. Despite this, the Hong Kong Monetary Authority (HKMA) maintains that the asset quality of residential mortgage loans remains strong.

    The overall mortgage loan delinquency rate stood at 0.13% by the end of March, with negative equity cases making up just 0.17%. This suggests that most borrowers are able to repay their mortgages on time, and the risks associated with bank mortgage businesses remain under control.

    Hong Kong's lived-in home prices have been declining, falling 0.49% in March and 1.7% for the quarter as a whole. The decline is attributed to caution among homebuyers due to global economic uncertainty and trade tensions between the US and China.