Decline from previous quarter signals worst is probably over for homeowners
The number of homeowners with negative equity in their properties fell in September from the previous quarter, the first decline since the end of 2001.
Hong Kong Monetary Authority data released yesterday showed that 99,805 bank mortgages were in negative equity on September 30, 5.6 per cent less than the 105,697 at the end of June.
The amount owed on these loans totalled $155 billion, or 29 per cent of all bank mortgages, compared with $165 billion three months earlier.
Until now, the number of homes in negative equity has climbed each quarter, except for one, since the authority started its survey two years ago. In March last year, the number fell to 67,500 from 73,000 in December 2001.
Negative equity occurs when owners' homes are worth less than the outstanding balances on their mortgages.
September's decline likely signals that the worst is over for Hong Kong's beleaguered homeowners, many of whom bought when property prices peaked in 1997 and 1998 and have since seen home prices tumble by two-thirds.
