Hong Kong Mortgage Approvals Jump 7.1% in December Despite Fewer Applications

Hong Kong's mortgage market closed 2025 on a mixed note, with approved loans climbing 7.1% month-over-month to HK$31.2 billion in December even as new applications fell 5.1% to 7,612, according to the Hong Kong Monetary Authority's latest residential mortgage survey.

The divergence suggests banks are working through a backlog of applications from earlier months while fresh buyer interest cools heading into the new year.

Primary and Secondary Markets Both Gain

Primary market mortgage approvals rose 8.2% to HK$11.7 billion, while secondary market transactions—typically existing home sales—increased 7.6% to HK$16.8 billion. Refinancing bucked the trend, slipping 0.6% to HK$2.7 billion as homeowners appear satisfied with current rates.

Actual loan drawdowns, which reflect completed transactions, edged up 1.7% to HK$20 billion. The gap between approvals and drawdowns indicates some approved borrowers haven't yet closed their purchases.

HIBOR Loans Still Dominate

HIBOR-linked mortgages remained the overwhelming preference, though their share dipped slightly from 90.7% in November to 89.8% in December. Loans tied to best lending rates ticked up from 1.1% to 1.3%—a marginal shift that doesn't signal any meaningful trend change.

For context, HIBOR-referenced loans hit 93% of new mortgages back in January 2025, so the December figure represents some modest drift toward fixed-rate products as borrowers hedge against rate volatility.

Outstanding Loans Inch Higher

Total outstanding mortgage debt grew 0.2% to HK$1,917.5 billion by end-December, up from HK$1,884.2 billion at end-May 2025. Credit quality remains solid: the delinquency ratio held at just 0.14%, and rescheduled loans stayed near zero.

These December numbers cap what appears to be a recovery year for Hong Kong property. Home prices rose 3% in 2025—the first annual gain in four years—aided by falling borrowing costs and the 2024 removal of extra stamp duties that had dampened transactions.

With the Hong Kong Base Rate at 4.0% and the HKMC offering 10-year fixed rates around the same level, mortgage costs have stabilized after years of increases. Whether January's application data shows renewed buyer appetite will indicate if December's dip was seasonal or something more persistent.