Timothy Morano Aug 31, 2026 09:29
Hong Kong mortgage applications fell 24% in July 2026 to 9,212, as market activity cooled from June. Mortgage approvals dropped 11.4% to HK$44.8 billion.
The Hong Kong Monetary Authority (HKMA) reported a significant slowdown in residential mortgage activity for July 2026. Mortgage applications fell 24% month-on-month to 9,212, while approvals declined 11.4% to HK$44.8 billion. This marks a sharp reversal from June’s stronger performance, when applications rose 12.5% and approvals surged 25.8% to HK$50.6 billion.
Breaking down the data, mortgage loans for primary market transactions shrank 14.1% month-on-month to HK$13.3 billion, and loans for secondary market transactions dropped 16.4% to HK$24.2 billion. In contrast, refinancing activity picked up, with loans approved for refinancing jumping 18.4% to HK$7.3 billion. Despite the overall decline in approvals, loans drawn down in July increased 6% to HK$29.4 billion, reflecting activity from prior approvals.
Interest rate pricing also shifted. The share of new mortgage loans tied to the Hong Kong Interbank Offered Rate (HIBOR) fell from 70% in June to 61% in July, while loans linked to traditional best lending rates held steady at 1.3%. This decline in HIBOR-linked loans may reflect market caution amid rate volatility or shifts in borrower preferences.
The total outstanding value of residential mortgage loans edged up 0.4% to HK$1,963.5 billion at the end of July, continuing a trend of modest month-on-month increases. The mortgage delinquency ratio remained stable at a historically low 0.11%, and rescheduled loans were negligible, signaling limited stress among borrowers.
The July slowdown comes after a robust first half of 2026, characterized by recovering demand and easing credit risks. For example, in June, primary-market mortgage approvals rose 32.3% month-on-month to HK$15.5 billion, and secondary-market transaction loans increased by 21.6% to HK$28.9 billion. Refinancing approvals also grew 30.6% to HK$6.2 billion. These gains were supported by improving home prices, lower borrowing costs, and policy measures aimed at stabilizing the property market.
However, the July contraction suggests that affordability concerns and sensitivity to HIBOR movements remain significant headwinds. Borrowers may also be cautious following the rapid recovery in earlier months, particularly as home prices stabilize and transaction volumes normalize.
Looking ahead, the trajectory of Hong Kong’s residential mortgage market will likely depend on interest rate trends and broader economic conditions. While credit stress remains minimal, any sustained changes in HIBOR or macroeconomic uncertainty could weigh further on borrowing activity. Market participants will closely monitor the next HKMA update to gauge whether July’s decline was a temporary blip or the start of a cooling trend.
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