Hong Kong mortgage applications and loan values decline in August

The Hong Kong Monetary Authority (HKMA) reported a decline in residential mortgage activity for August, with new mortgage applications falling 8.3% month-on-month to 8,446 cases. The total value of newly approved mortgage loans dropped 28.2% to HK$32.2 billion, driven by decreases in both new primary market (down 31.8%) and secondary market (down 36.7%) transactions.

In its semi-annual report on monetary and financial stability, the HKMA noted that household debt grew by 5.2% during the first half of the year. This growth outpaced the local GDP growth rate, causing the household debt-to-GDP ratio to rise from 87.6% in the second half of last year to 89.5% in the first half of this year.

Despite the mortgage slowdown, residential mortgage loans grew by 2.5% in the first half of the year due to increased property transactions. Additionally, retail bank pre-tax profits rose by 20.4% year-on-year, supported by increased net interest income, fees, and commission income. Local corporate loans also saw a reversal in trend, growing by 6.5% in the first half of the year.