Negative equity surges for Hong Kong homeowners as prices slide

Business Materials 3 February 2009 06:54 (UTC +04:00)

The number of Hong Kong homeowners with negative equity on their properties quadrupled in the last quarter of 2008, according to official figures released Tuesday, dpa reported.

The city of 6.9 million had almost 11,000 cases of negative equity from October to December, or 2.3 per cent of all mortgages, compared with 2,500 cases in the previous quarter.

Analysts said they expected the number of people with mortgages greater than the value of their homes to continue rising in 2009 as property prices slump in the global economic downturn.

Cases of negative equity peaked at more than 100,000 during the 2003 outbreak of SARS, or severe acute respiratory syndrome, which sent stock and property prices in the former British colony into free fall.

Home prices were expected to fall by 10 to 15 per cent in Hong Kong over the course of 2009. Hong Kong stocks, meanwhile, have lost more than 50 per cent of their value in the past year.