Headline news about a big jump in negative home equity may look scary at first sight. After all, the data indicates a 22-fold increase from a year ago, to an 18-year high of 12,164 cases. But let’s put things in perspective. Last time Hong Kong had a real property slump because of the severe acute respiratory syndrome (Sars) outbreak in 2003, there were 105,697 such cases. Of course, that doesn’t stop real estate developers and property agencies from urging the government and the Hong Kong Monetary Authority to scrap the market-cooling “spicy” measures implemented a decade ago so as to jolt the housing market and bolster prices again. It’s good they find compassion for families whose home equities are under water. More likely though, they are dying for a return to the go-go years of the past decade, which made the city’s property market the most expensive and unaffordable in the world. Indeed, some analysts have attributed home unaffordability as a contributing factor to the social unrest that manifested itself in 2019. 27,000 new homes to hit Hong Kong market this year Negative equity is only a niche problem and a result of an average 15 per cent drop in home prices last year. As a result, banks have been writing down the value of properties held as collateral in mortgages for clients. But bad debt currently only makes up 0.06 per cent of total mortgages, which is very low indeed and poses no threat to the local banking system. Furthermore, since 2003, lenders have laid down greater financial buffers against risks. Like any investment portfolio, a flat can go under from time to time. But it’s only a paper loss if you don’t sell. After all, other than speculators, most people treat their homes as long-time, often lifelong, assets. The Monetary Authority is right to insist on “monitoring further” before any decision can be made. It may be argued that last year’s correction is much needed and accords with the policy aims of the decade-long cooling measures, which include making housing affordable and preventing runaway inflation. The removal of the broad-based measures is therefore premature. Hong Kong property deals hit three-month high in January, may rise this month too Those living in homes now worth less than their purchase prices do have reason to worry, most notably their job security to ensure making mortgage payments on time. They need to be patient for a market revival. With the reopening of borders and Hong Kong’s push to attract talent, immigration from the mainland and overseas will likely provide new demand for homes and put a floor on prices. That in turn should lift existing borrowers out of negative equity. But it behoves the government to match such a revival with a vibrant job market that offers not only security but also quality for young people and new homeowners building a career. This is a fundamental economic issue that the government must address.