Title: Deceleration in Hong Kong Mortgage Applications in December Amid Economic Uncertainties
December witnessed a 21.1% slump in mortgage applications in Hong Kong, the city’s unofficial central bank reveals, hinting at buyer caution amid geopolitical volatility and escalating interest rates.
Hong Kong experienced a dip in the number of mortgage applications, with a decrease of over 20% in December, as stated by the city’s unofficial central bank. This downturn reflects a growing apprehensiveness among potential homeowners due to unpredictability in the global political landscape and an upswing in interest rates.
Applications for mortgages in the city diminished by 21.1% in the last month of the year, down to 6,306 from November’s figures, marking the first monthly plunge since the 15.9% decrease in September, as reported in a release by the Hong Kong Monetary Authority (HKMA).
The city’s benchmark interest rate, synchronized with US monetary policy since 1983, is predicted to stay elevated for a longer period. This is due to anticipation of a wave of tariffs and protectionist measures that could spike inflation, following Donald Trump’s return to the US presidency.
“Interest rates continue to be the main driving force influencing the real estate market this year,” comments Martin Wong, Greater China Senior Director and Head of Research at Knight Frank.
After witnessing 11 hikes between March 2022 and July 2023, the mortgage and borrowing rates in Hong Kong reached a 23-year peak. However, a downward trend started in September 2024, with further reductions in October and December.
To sustain their businesses amid these changes, banks expedited their mortgage approvals. They cleared 5,342 applications totaling HK$25.53 billion (US$3.28 billion) in December, marking a 2.6% rise from the previous year and a 5.4% increase from November.
This article aims to inform individuals interested in real estate investment about the current market conditions in Hong Kong, although its primary purpose is not to promote investment.
