Hong Kong Economy Improves, Number of Negative Equity Homes Drops Sharply by 46.4%

Central News Agency

(Central News Agency reporter Chang Chien, Hong Kong, 1st) Affected by improving economic conditions and an inflow of overseas talent, the number of negative equity residential properties in Hong Kong at the end of the first quarter this year decreased by 46.4% compared to the end of the previous quarter.

According to the latest figures released by the Hong Kong Monetary Authority, at the end of the first quarter this year, the number of local negative equity residential properties was 11,424, a decrease of 46.4% from 21,304 at the end of the fourth quarter of 2025.

Compared to the end of the first quarter of 2025, the number of negative equity residential properties at the end of the first quarter this year saw an even sharper decrease of 72%; the number was 40,741 at the end of the first quarter last year.

Negative equity refers to a property mortgaged to a bank for a loan, where its market value is lower than the outstanding principal balance.

Real estate, finance, and tourism have always been important pillars of Hong Kong's economy. Whenever the economy is sluggish, a large number of negative equity properties appear in the housing market. In the years following the handover of Hong Kong's sovereignty in 1997, the housing market plummeted due to various factors, leading to social unrest.

In June 2003, the number of negative equity residential properties in Hong Kong reached as high as 105,697. At that time, the government was planning to legislate Article 23 of the Basic Law, and social unrest was high. The negative equity problem was seen as intensifying public dissatisfaction. On July 1 of the same year, 500,000 people took to the streets to protest the Article 23 legislation.

After the outbreak of COVID-19 in 2020, the local economy was sluggish, and many people emigrated after the "anti-extradition bill" movement, increasing market supply and causing housing prices to fall. The number of negative equity cases continued to rise.

However, with the improvement of Hong Kong's economy and the government's introduction of talent, the housing market experienced a "mini-spring," stimulating housing price increases, and the number of negative equity cases began to fall.

In 2025, Hong Kong's economic performance improved, with real GDP increasing by 3.5% year-on-year. Authorities expect GDP to continue growing between 2.5% and 3.5% this year, with exports and domestic demand as the main drivers. (Editor: Chen Kai-yu) 1150501

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