Hong Kong property: mortgage insurance hits 10-month high as property easing fuels transactions

Name: How Hong Kong's housing market became among the world’s most unaffordable
Uploaded: 2024-05-09T09:38:22.000Z
Duration: 13 min
Description: How Hong Kong's housing market became among the world’s most unaffordable

Mortgage insurance rose to HK$13.71 billion (US$1.75 billion) in April, the most since HK$16.07 billion in June last year

In the first four months of the year, mortgage insurance amounted to HK$43.43 billion from 8,450 cases, versus HK$96.91 billion from 17,498 applications a year ago

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The increase in the value of mortgage insurance and applications comes on the back of a surge in property transactions in Hong Kong. Photo: Yik Yeung-man

Salina Li

Published: 5:38pm, 9 May 2024Updated: 5:50pm, 9 May 2024

Mortgage insurance for residential property in Hong Kong continues to rise amid a jump in transactions following the removal of cooling measures, hitting a 10-month high in April.

Newly approved mortgage insurance rose 53 per cent in value to HK$13.71 billion (US$1.75 billion) and 47 per cent to 2,613 in terms of applications in April, compared with February, according to data from mortgage broker mReferral on Thursday. It was the highest since HK$16.07 billion from 2,847 cases recorded in June last year.

The increase comes on the back of a surge in sales of new and second-hand homes in Hong Kong, which jumped 115 per cent month on month to 8,551 units in April, according to Land Registry data released on Friday.

In his budget speech on February 28, Financial Secretary Paul Chan Mo-po announced the lifting of all property curbs put in place more than a decade ago to cool an overheated market. The Hong Kong Monetary Authority simultaneously eased mortgage financing, making homes valued at less than HK$30 million eligible for 70 per cent mortgage financing, compared with the previous cap of 60 per cent for homes valued between HK$15 million and HK$30 million.

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How Hong Kong's housing market became among the world’s most unaffordable

Under the Hong Kong Mortgage Corporation’s mortgage insurance programme, the insurance aims to protect banks from losses, on the portion of the loan over the 70 per cent loan value in case of defaults by borrowers.