The rising number of homeowners in Hong Kong with apartments valued below their mortgages may further affect sentiment, which is already hurt by the global downturn and government measures, according to Barclays Capital Research.
Approximately 1,653 mortgages suffered “negative equity” in Q3, up from only 48 loans three months earlier, with home loan values increasing to HK$4.1 billion (S$659.8 million) from HK$58 million, said the Hong Kong Monetary Authority (HKMA).
This provides “the first clear evidence of the on-going decline in Hong Kong property prices,” said Andrew Lawrence and Vivien Chan, analysts from Barclays Hong Kong.
They noted that the increasing negative equity “suggests that bank valuations for mortgages are falling quickly.”
“Home buyers will either need to use more equity to fund their home purchases or negotiate lower prices.”
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