Hong Kong mortgage approvals fall to HKD 32.2 bn in August; delinquency stays low at 0.11%

Facts

The HKMA's residential mortgage survey for August 2026, released on 30 September, shows mortgage applications at 8,446, down 8.3% from July 2026. New loans approved totalled HKD 32.2 bn, down 28.2% from July 2026. ¹ Approvals for secondary-market properties were HKD 15.3 bn (down 36.7% from July 2026) and for primary-market properties HKD 9.1 bn (down 31.8% from July 2026), while refinancing approvals rose to HKD 7.8 bn (up 6.8% from July 2026).

Loans drawn down rose to HKD 32.8 bn, up 11.6% from July 2026, and outstanding mortgages reached HKD 1,975.4 bn at end-August, up 0.6% from end-July 2026. ² The share of new loans priced off HIBOR was 57%, down from 61% in July 2026, and the share priced off the best lending rate was 1.9%, up from 1.3% in July 2026. The HKMA put the mortgage delinquency ratio at 0.11% and said the rescheduled loan ratio was unchanged at nearly zero. ³

Analysis

Across 2026 the monthly survey shows a spring and early-summer surge that has now reversed. Approvals rose from HKD 32.5 bn in January to a peak of HKD 50.6 bn in June, then fell for two months to below the January level. ⁴ The mix matters: purchase-related approvals fell sharply while refinancing grew, which points to borrowers repricing existing loans rather than to new buying. Drawdowns still rose because they lag approvals made in earlier months, so balances keep growing for now: outstanding mortgages rose from HKD 1,923.4 bn at end-January to HKD 1,975.4 bn at end-August.

Credit quality is not the constraint. The delinquency ratio edged down from 0.13% in January to 0.11%, far below banks' overall classified loan ratio of 1.82% at end-June. ⁵ The pressure sits elsewhere in household balance sheets: the HKMA put household debt at 89.5% of GDP in the first half, and the base rate rose to 4.25% in September, up 25 bp from 4.00%. ⁶

Implications

Counterpoints and uncertainties

One month of data is a weak signal: approvals swung widely during 2026, including a sharp rise in March, and August can be affected by the timing of new-project launches. The September rate rise may also push more borrowers to refinance or fix rates, which would lift refinancing approvals while purchase demand stays soft. A low delinquency ratio can lag stress, because mortgage arrears usually rise only after unemployment and payment burdens increase.