In "Hong Kong Property," Centaline Mortgage expects the negative asset figures to continue to decline this year

The Hong Kong Monetary Authority today announced the results of the negative equity residential mortgage loan survey, showing that the number of negative equity residential mortgages at the end of Q4 2025 decreased to 21,304, down 32.3% from 31,449 at the end of Q3, marking a decline for three consecutive quarters; the amount involved decreased by 32.7% from HKD 156.8 billion to HKD 105.4 billion.

Centaline Mortgage's Managing Director, Wang Meifeng, pointed out that the number of negative equity residential mortgages recorded a significant decline at the end of Q4 2025, falling to 21,304. This is mainly due to the rebound in property prices, with prices steadily rising during the quarter, leading to an increase in property valuations, allowing some negative equity properties to have a market value higher than the mortgage amount, thus successfully exiting the negative equity category. Throughout 2025, the local property market continued to show steady improvement, with prices rising an average of 2% to 3% in Q4 after experiencing a rebound in Q2 and Q3, resulting in an average annual increase of about 5%, and a recovery of 8% from the low point of property prices during the year, successfully establishing a bottom and returning to an upward trajectory, which has been the core driving force behind the continuous decline in negative equity numbers.

Looking ahead to 2026, Wang Meifeng believes that the property market will continue to improve, supporting the rebound in property prices, coupled with a decrease in the usage rate of high loan-to-value mortgages, which will help drive the continued reduction of negative equity numbers this year. With the full relaxation of mortgage policies and the complete restoration of the 70% mortgage guidelines by banks, the demand for high loan-to-value mortgages has significantly decreased. In recent years, the usage ratio of high loan-to-value mortgages has gradually fallen from over 30% to an average of about 15% in 2025. Last year, despite an increase in property market transactions, the number of high loan-to-value mortgage applications also significantly decreased by about 24% based on the aforementioned factors; the decline in the usage rate of high loan-to-value mortgages also means that the risk of falling into negative equity has decreased. It is expected that the number of negative equity cases will continue to decline in 2026, which is favorable for the healthy development of the property market.

Wang Meifeng pointed out that although the negative equity delinquency rate rose slightly from 0.24% in Q3 to 0.31% in Q4, compared to the delinquency rate of about 1% during the period of 2003, the current delinquency rate remains at a relatively low level, reflecting the continued strong repayment ability of individuals with negative equity cases. The likelihood of continued property price increases also reduces the risk of negative equity, thus the actual credit risk and market risk of negative equity cases remain very low at present