Caroline Bishop
May 31, 2025 08:03
The Hong Kong Monetary Authority reports a significant 7.8% decline in mortgage applications for April 2025, coupled with a spike in secondary market transactions.
The Current Landscape of Mortgage Applications
According to the latest residential mortgage survey released by the Hong Kong Monetary Authority (HKMA), April 2025 witnessed a notable 7.8% decline in mortgage applications compared to March, amounting to a total of 7,795 applications. This trend indicates a cautious approach from potential buyers amid fluctuating market conditions.
Mortgage Loans Approved: A Paradox?
Interestingly, while applications saw a drop, the value of mortgage loans approved in April actually increased by 2.4% from the previous month, hitting HK$25.3 billion. The data reflects a complex market where demand shifts between primary and secondary markets. Primary market loans dropped by 7.5% to HK$9.3 billion, while secondary market loans surged by 17.6%, reaching HK$13.7 billion. Such a shift prompts questions: Are buyers finding better opportunities in the secondary market, or is investor behavior simply adapting to recent market dynamics?
The Drawn Down Loans: A Silver Lining?
In April, drawn-down mortgage loans rose by 7.7%, totaling HK$17.1 billion. This uptick may suggest that while prospective buyers are hesitant to apply, those who do proceed are more likely to complete their purchases. Additionally, a shift in pricing preferences emerged; the proportion of new loans indexed to the Hong Kong Interbank Offered Rate (HIBOR) increased from 90.4% to 91.8%, indicating a growing reliance on market-dependent rates. On the other hand, loans linked to best lending rates saw a dip from 3.2% to merely 2.3%, highlighting changing borrower preferences.
Outstanding Mortgage Value and Market Health
The outstanding value of mortgage loans experienced a slight increase of 0.2% month-on-month, reaching HK$1,881.9 billion by the end of April. More interestingly, the delinquency ratio remains impressively low at 0.13%, with the rescheduled loan ratio maintaining stability near 0%. This indicates a robust market environment, despite the recent decline in applications.
As we navigate these changes, it’s critical for investors, homeowners, and industry stakeholders to understand the implications of these trends. At Extreme Investor Network, we strive to provide you with incisive analysis and actionable insights. Stay informed as we continue to dissect these developments and explore what they mean for your investments and the broader market.
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