Hong Kong’s residential mortgage loans (RMLs) in negative equity dropped 51 percent to HK$200 million in the third quarter from HK$500 million in the second quarter, according to data compiled by the Hong Kong Monetary Authority.
The unsecured portion of the loans hit HK$100 million.
However, the loan-to-value ratio of RMLs in negative equity surged to 138 percent in Q3 from 122 percent in Q2. The three-month delinquency ratio of mortgage loans in negative equity rose 0.93 percent from 0 percent in Q2.
RML in negative equity means that the outstanding loan amount exceeds the mortgaged property’s market value.
Hong Kong’s property market faces overheating concerns, with home prices rising by nearly 50 percent since the start of 2010 due to demand from buyers in mainland China, and low interest rates that track the US monetary policy, as the HK dollar is pegged to the US dollar.