The HKMA has announced that the number of negative equity residential loans in the fourth quarter of last year. It increased by 14,040 to 25,163 cases. As the property price falls constantly, it is estimated that the number of negative equity cases in the first two quarters of this year will double by another 25,000 cases to more than 50,000 cases in total.
In January of this year, the property prices have been decreasing, and the immigrants' property listings
are the main cause of this decline. The sellers of these listings were eager to sell these premises, so the asking prices of these listings were cut deeply, and many of them had been reduced by twenty-five per cent in the second half of last year so that it could close the deals more smoothly. Consequently, these current low transaction price cases caused the transaction cases with 80% to 90% loan-to-value ratio two to three years ago to become negative equities immediately.
Currently, the stock market is weak, the retail and catering industry have been hit by the new public consumption habits to the northern city of Shenzhen. The local business environment is dreadful, leading to the home buying confidence being low. Consequently, the transaction volume of the property market has decreased significantly. Last Friday, there were only seventeen transactions in thirty-five major housing estates, and it meant that there was only one transaction average in every two housing estates, with understanding that the quiet market has been falling into frozen state.
In terms of property prices, the decline speed has been decreasing from slow to rapid, and if it continues to decline at this rate, the property prices will decrease 10% in the initial half of this year. The downward property price is now a trend, and general measures can no longer stop this trend, and it is difficult to predict how much it will fall, but it is for sure that the downtrend will not be changed in this year.
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