Residential mortgage loans in negative equity: End of June 2024
The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority announced today (July 31) the results of its survey on residential mortgage loans (RMLs) in negative equity at end-June 2024.
The estimated number of RMLs in negative equity decreased to 30 288 cases at end-June 2024 from 32 073 cases at end-March 2024. These cases were mainly related to bank staff housing loans or RMLs under mortgage insurance programme, which generally have a higher loan-to-value ratio.
The aggregate value of RMLs in negative equity decreased to HK$155 billion at end-June 2024 compared with HK$165.3 billion at end-March 2024.
The unsecured portion of these loans decreased to HK$10 billion at end-June 2024 from HK$11.2 billion at end-March 2024.
The three-month delinquency ratio of RMLs in negative equity remained at a low level of 0.11 per cent at end-June 2024 as compared to 0.06 per cent at end-March 2024.
It is important to note that the figures derived from this survey relate only to RMLs provided by authorized institutions on the basis of first mortgages and which the reporting institution knows to be in negative equity (i.e. the outstanding loan amount with the reporting institution exceeds the current market value of the mortgaged property). Not included in these figures are RMLs associated with co-financing schemes which would be in negative equity if the second mortgages were taken into account. The extent to which such RMLs are in negative equity is not known because authorized institutions do not maintain records on the outstanding balances of the second mortgages.
The mortgage portfolios of the surveyed authorized institutions represent about 99% of the industry total. The survey results have been extrapolated to estimate the position of the banking sector as a whole.
Source: AI-generated images
Ombudsman probes arrangements for recovering public rental housing flats by authorities
The following is issued on behalf of the Office of The Ombudsman:
The Ombudsman, Mr Jack Chan, today (September 19) announced the launch of a direct investigation operation to examine in detail the workflow of and arrangements for recovering public rental housing (PRH) flats for reallocation by the authorities.
Every year, the Hong Kong Housing Authority (HKHA) and the Hong Kong Housing Society (HKHS) recover PRH flats due to various reasons for reallocation, such as tenants passing away, moving into residential care homes, purchasing subsidised sale flats, or breaching the terms of tenancy agreement. Last year (i.e. 2023-24), the HKHA allocated about 23600 PRH flats, of which around 19700 were recovered flats. The number of recovered PRH flats is expected to increase as the authorities have recently stepped up their efforts to combat the abuse of PRH.
At present, the HKHA's key performance indicator (KPI) for refurbishing a vacant PRH flat is 44 days. The Ombudsman's Office has noticed that, over the past three years, the average time taken to refurbish a vacant PRH flat has been close to this KPI. Nevertheless, refurbishment works have occasionally taken more than 100 days to complete, with one instance lasting as long as 197 days. Whether the process of recovering and refurbishing PRH flats by the HKHA and the HKHS is proper and efficient will directly affect whether families on the waiting list for PRH can be offered flats as soon as possible.
Furthermore, as the authorities have enhanced the efforts in combating tenancy abuse, the number of appeal cases is on the rise. Under the current procedures, the recovery of a PRH flat is suspended during an appeal. The Office is, therefore, concerned about whether there is room to expedite and improve the workflow of and procedures for appeals.
On the other hand, the Office receives complaints from time to time alleging the authorities for failure to properly dispose of items left in PRH flats by outgoing tenants, particularly singleton tenants, and casually discarding items without contacting the tenants concerned or their next of kin, and without obtaining the tenants' prior consent.
Mr Chan said, "The current-term Government has been making every effort to increase PRH supply to satisfy people's housing needs, and its efforts are delivering tangible results. If PRH flats are recovered and refurbished in a timely manner for reallocation to the families on the PRH waiting list as soon as possible, it would not only shorten their waiting time but also enhance their sense of happiness and contentment. In this connection, I have decided to launch this direct investigation operation to carefully examine the workflow of and arrangements for the Housing Department (as the HKHA's executive arm) and the HKHS to recover PRH flats, including the specific procedures for refurbishing flats for reallocation and for tenants to appeal against the Notice-to-quit, as well as the various ways to dispose of items left in PRH flats by outgoing tenants. Pertinent improvement recommendations will be made where necessary."
The Ombudsman welcomes views from members of the public on this topic. Written submissions should reach the Office of The Ombudsman by October 14, 2024:
Address: 30/F, China Merchants Tower, Shun Tak Centre
168–200 Connaught Road Central, Hong Kong
Fax: 2882 8149
Email: complaints@ombudsman.hk
Ombudsman probes arrangements for recovering public rental housing flats by authorities Source: HKSAR Government Press Releases
