Hong Kong’s Mortgage Market: A Closer Look at January 2025 Trends
By Ted Hisokawa
February 28, 2025
The landscape of the Hong Kong mortgage market is currently experiencing significant shifts. According to the latest report from the Hong Kong Monetary Authority (HKMA), there has been a 3.3% rise in mortgage applications for January 2025, signaling a renewed interest in residential property. However, this rise in applications comes with a mixed bag of approval rates, drawdowns, and shifting loan dynamics that savvy investors and homeowners alike should understand.
Increased Applications but Declining Approvals
The HKMA reported that there were 6,516 mortgage applications submitted in January, a welcome 3.3% uptick compared to the previous month. Conversely, the total approved loan amount saw a slight dip of 2.1%, landing at HK$25 billion. This divergence raises intriguing questions about the market’s health and the perceived barriers homeowners are facing.
While loans for primary market transactions surged by an impressive 15.5% to HK$10 billion, loans for the secondary market and refinancing took a hit, falling by 11.7% and 8.8%, respectively. This trend indicates that potential homeowners may still be seeking new properties rather than entering into the more risky secondary market, which often involves existing properties with an associated history or potential maintenance issues.
Drawdowns Show Promising Growth
In a striking contrast to the approval figures, the amount of mortgage loans drawn down saw a robust growth of 17.6%, reaching HK$15.6 billion. This suggests that while there are hurdles in securing approval for new applications, once borrowers do get approved, they are eager to finalize their loans.
Shifts in Loan Pricing
An interesting shift has occurred in how mortgage loans are being priced. The majority of new loans—93%—are now referencing the Hong Kong Interbank Offered Rate (HIBOR), a substantial rise from 91.3% in December 2024. Meanwhile, loans that were traditionally tied to best lending rates have decreased to 3.4% from 4.1%. This trend illustrates a pivot towards variable-rate loans, which could indicate anticipation of future interest rate changes.
Stability Amidst Fluctuations
Despite these fluctuations in loan approvals and drawdowns, the mortgage delinquency ratio remains remarkably low at 0.12%, with the rescheduled loan ratio hanging at nearly 0%. Such promising figures suggest that the financial health of borrowers is stable, which is critical for the long-term sustainability of the mortgage market.
Conclusion
The HKMA’s findings reveal a complex but informative snapshot of Hong Kong’s mortgage market dynamics in early 2025. While applications are on the rise—a positive sign of potential market recovery—approved loans and shifts in pricing strategies indicate that both lenders and borrowers are navigating a cautiously optimistic landscape.
At Extreme Investor Network, we emphasize the importance of staying informed about these developments. The Hong Kong mortgage market, while presenting both opportunities and challenges, continues to attract attention. Whether you’re a potential homeowner, an investor looking to capitalize on market fluctuations, or simply curious about the dynamics at play, there’s much more to explore.
For deeper insights and expert analyses tailored to the ever-evolving financial ecosystem, stay tuned to Extreme Investor Network, your go-to resource for news and trends that matter.