Negative equity cases in Hong Kong's real-estate market hit a new high
Negative equity cases in Hong Kong's real-estate market hit a
new high , according to official data released on Wednesday, as elevated interest rates continued to weigh on property prices.
Advertisement
The number of homes whose
value sank below what their owners were paying for their mortgages rose 6.1 per cent to 40,741 cases in the first quarter from the preceding period, data from the Hong Kong Monetary Authority (HKMA) showed.
The tally was the highest on record since the fourth quarter of 2003, according to mortgage brokers. The value of the negative equity cases rose by 5.5 per cent to around HK$205.9 billion (US$26.5 billion). It was also the second-highest value of negative equity cases since the HK$207.5 billion that was recorded in the third quarter of last year.
'Residential property prices fell 1.7 per cent during the period and the increase in negative equity cases was expected,' a HKMA spokesman said.
'The asset quality of the banking sector's residential mortgage loans remains good,' the spokesman said. 'By the end of March 2025, the overall mortgage loan delinquency rate was only 0.13 per cent and the delinquency rate of negative asset cases was only 0.17 per cent, maintaining a low level. This reflects that the vast majority of mortgage loan borrowers can repay on time and the risks of bank mortgage businesses are controllable.'
Advertisement
Hong Kong's lived-in home prices declined 0.49 per cent in March, according to an index published by the Rating and Valuation Department on Monday, following a 0.56 per cent decline in February. The index had retreated by 1.7 per cent as of the end of the first quarter to a level last seen in July 2016.
The falling home prices were attributed to caution among homebuyers amid a trade war between the US and China and uncertainty about the path forward for global interest rates.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Asia Times
3 hours ago
- Asia Times
Hopes for a Xi-Trump summit are naively misplaced
US President Donald Trump and Chinese President Xi Jinping's surprise phone call—marking the first direct communication between the leaders in months—may signal a temporary thaw in an otherwise frosty and structurally adversarial relationship. While America's restoration of Chinese student visas and China's resumption of blocked critical mineral trade suggest detente, this contact, like others in the history of US-China summits, could quickly prove to be more performative than substantive. The danger lies not in dialogue but in the illusion that the leader-to-leader call, which Beijing insisted Trump requested, will meaningfully alter the deep geopolitical, ideological and economic divergences that define Sino-American relations today. News reports said Xi told Trump to roll back tariffs and other trade measures that are roiling the global economy while warning him about intensifying the dispute over Taiwan. Trump claimed on social media that the call delivered a 'positive conclusion', including on China's restrictions on critical mineral exports, and that lower-level discussions on trade would follow. He said, 'We're in very good shape with China and the trade deal.' Both leaders invited each other to visit their countries. However, reports noted that there was nothing in either side's official statements to indicate the critical mineral issue had been resolved. And China has reasonable cause to remain on guard despite Trump's post-call positivity. Let us count the many impediments to real and lasting reconciliation: The most acute danger stems from Trump's lack of strategic coherence. Unlike the Kissinger-Nixon doctrine of detente, which was structured, calculated and guided by a realpolitik vision of global balance, Trump's approach is reactive and transactional and thus prone to Chinese manipulation. Concessions, including the reopening of student exchanges on the US side and lifting critcal mineral restrictions on China's—appear to be issued in exchange for vague 'reciprocity' rather than any long-term strategic realignment. For Beijing, such inconsistency is easily exploitable. Xi understands that Trump is prone to tactical surprises and policy reversals, allowing China to notch one-by-one concessions while offering minimal structural reforms or broad policy changes in return. This understanding of Trump's tactics and views may also embolden China to keep testing US resolve and commitment in the Taiwan Strait, East Sea and South China Seas, knowing that by doing so it strengthens its negotiating leverage in wresting future US concessions. Much has been made of US-endorsed 'de-risking' from China without actually 'decoupling.' The resumption of trade in critical minerals—crucial to US defense and clean energy sectors—signals a potential pause in America's techno-economic containment of China, which if lasting, would contradict the bipartisan consensus in Washington that China poses a 'systemic challenge.' This could also send mixed messages to allies such as Japan, South Korea and key ASEAN economies, many of which are now being pressured to restrict technology transfers to China, particularly in regard to AI and quantum computing. If Trump reverses this posture, potentially at a Trump-Xi in-person summit, it would necessarily undercut the anti-China coalition the US has been trying to build since 2017 and signal a climbdown of epic proportions. An in-person summit with Xi would give both leaders global optics, something they arguably both need as their hardline stances cause political tremors at home and restlessness abroad. Yet symbolism without substance carries its own risks. The 2019 Mar-a-Lago summit and the 2018 G20 truce in Argentina were celebrated photo ops that ultimately yielded few strategic gains. Indeed, they were followed by tariff escalations, cyber accusations and deepened distrust. Xi, ever conscious of China's 'national rejuvenation' drive, may use a summit with Trump to signal that China is not isolated—even amid Western efforts to contain it – and that he brought the US to heel through his tough negotiating posture. Should he succeed in presenting Trump as a president willing to do business without political preconditions, it will bolster China's power on the world stage. This symbolism would serve Xi well amid research that shows China is straining under the weight of assisting various countries when its own economy remains fragile. There will be a temptation to portray a Trump-Xi summit as a return to the two sides' previous 'managed rivalry' model. Yet this notion is predicated on mutual trust, which no longer exists. A brief thaw may offer breathing space for both, but there is no sign yet of lasting strategic stability. During the previous Cold War, the US and Soviet Union were able to negotiate arms control and crisis management protocols. No such guardrails exist between the US and China today. The resumption of critical mineral trade and educational exchanges, while welcome, won't be enough to reverse mutual mistrust, especially when military encounters in the Taiwan Strait or the South China Sea could easily still spiral out of control. Increasingly politicized charges against Chinese nationals in the US are fueling that mistrust. Those include new accusations that China is involved in 'agro-terrorism' that aims to wipe out US barley, wheat and corn yields by up to 50%. A PhD researcher of Chinese origin at the University of Michigan has been arrested in this connection. A potential Trump-Xi summit – despite stage-managed positive vibes and smiles for the cameras, could be yet another empty ritual—a theatrical handshake over unresolved and deep contradictions. To be sure, both leaders have reasons to engage. Trump seeks headlines as his popularity slips ahead of 2026 midterm elections; Xi seeks legitimacy for his tough negotiating posture that risks millions of Chinese factory jobs. But neither is offering a strategic roadmap that can reassure domestic or global audiences. Without a shared understanding of what strategic competition entails, and without mechanisms for escalation control, the optics of detente will only mask a rivalry that still threatens to spiral deeper and deeper into conflict.
South China Morning Post
4 hours ago
- South China Morning Post
Hong Kong's stablecoin law to take effect in August, building on virtual asset licensing
Hong Kong's new stablecoin ordinance, which requires issuers of assets backed by fiat currency to be licensed, is set to take effect on August 1, according to a government announcement on Friday. Advertisement The city's Legislative Council passed the bill regulating stablecoins – a type of cryptocurrency backed by a reference asset, usually fiat currencies such as the US and Hong Kong dollars – on May 21, but the government had not previously announced when it would take effect. The law requires a licence from the Hong Kong Monetary Authority to issue fiat-referenced stablecoins within the city or Hong Kong dollar-backed stablecoins anywhere. 'After the ordinance commences operation, the licensing regime will provide suitable guardrails for relevant stablecoin activities,' Treasury chief Christopher Hui Ching-yu said in a statement. 'It will be a milestone in facilitating the sustainable development of the stablecoin and digital asset ecosystem in Hong Kong.' The new regime gives Hong Kong one of the most comprehensive legal frameworks for stablecoins. It comes amid a global rush to regulate the digital assets that some fear could have destabilising effects on financial systems owing to the ease with which they allow money to cross borders. It also comes as US lawmakers continue to try to advance the stablecoin-focused Genius Act through Congress. The stablecoin law is part of a broader effort by Hong Kong to become a cryptocurrency hub. Under a 2023 law regulating other virtual assets, crypto exchanges must be licensed by the Securities and Futures Commission. The government has said its next focus will be on regulating over-the-counter and custodian services for virtual assets. Advertisement
RTHK
5 hours ago
- RTHK
URA to get two government sites for residential use
URA to get two government sites for residential use The government says the two sites are to be rezoned for residential use. File photo: RTHK The Chief Executive in Council has approved the granting of two sites to the Urban Renewal Authority (URA), with the plots to be rezoned for residential use. In a statement on Friday, the government said the sites on Bailey Street in Hung Hom and Tseung Kwan O Area 137 will be handed over to the URA by private treaty for a term of 50 years, at nominal premium of HK$1,000. It said, according to its understanding, the two sites will be rezoned for residential use through town planning procedures. Secretary for Development Bernadette Linn said granting the sites to the URA helps the body fulfil its urban renewal mission amid a sluggish property market. "The granting of the two sites to the URA could also benefit the community. Specifically, the Bailey Street site can create synergy with the URA's cluster of redevelopment projects in the Kowloon City area," Linn said. "As for the Tseung Kwan O Site, the original housing development of which has been deferred due to re-prioritisation of the Hong Kong Housing Authority's projects, granting the site to the URA would optimise the use of the land resources in a timely manner." The government said the site on Bailey Street, with a net area of 7,610 square metres, would have an estimated a total gross floor area of about 68,000 square metres. The site in Tseung Kwan O, it said, has a net area of about 9.15 hectares, and would have a total gross floor area of about 713,700 square metres. The URA said it welcomes the decision and will make good use of the extra revenue generated from the two sites.
