2016年CRI Negative Equity Cases Soar in Hong Kong Amid Falling Prices

（单词翻译）

In a disturbing trend for newer home owners in Hong Kong, the city's Monetary¹ Authority has revealed cases of 'negative equity²' have increased 14-fold through the first three months of this year, with over 14-hundred additional home owners dealing³ with it.

'Negative equity' refers to the scenario⁴ where the current market price of the property is below what the owner has in their outstanding mortgage.

Ivy⁵ Wong with Centaline Mortgages says the growing trend is something home owners in Hong Kong need to be aware of.

"The current price is 13 percent lower from the peak, if the mortgage is over 90 percent, it is likely to be a negative equity."

Hong Kong's Monetary Authority has repeatedly tightened⁶ the mortgage rules to cool down the market.

Right now, if you want to buy a house you want to live-in yourself in Hong Kong which costs less than 7-million, you're going to have to put down at least 40-percent.

However, Wan⁷ Wai Ming, General Manager of K. Wah Real Estate, says lenders associated with property developers are finding ways to get around those rules.

"For average people, it's pretty difficult to come up with a 40-pecent down payment for a two-bedroom apartment in Hong Kong. And because developers see continued demand from first-time buyers, they want to provide them with financial help. They will reference the guidelines from the Hong Kong Monetary Authority, but will 'fine-tune' the limit."

Hong Kong economist⁸ Andy Kwan says they can do this by finding loopholes in the regulations, which he says is essentially⁹ predatory lending.

"If a secondary mortgage is taken out which goes beyond the regulations, which can't the monetary authority do anything about it? If you can't make your payments to loans from mortgage companies, it means you're among the group which aren't truly able to afford to buy a property. And once the market plunges¹⁰, these people are the first to be hit. It will be a disaster for them."

Despite these concerns, Hang Sang Bank Chief Executive Rose Lee says it's still too early to be talking about a property market crash in Hong Kong right now.

"Even though the number of negative equity cases has jumped from dozens to over a thousand, the numbers are still not very high. Most of the home-owners with negative equity have mortgages with over 90 percent left. But they are the homes of the borrowers themselves, and most of them still have the ability to repay their loans."

Despite attempts by authorities in Hong Kong to keep the property market stable, which has included higher stamp duties, Hong Kong's property market still remains¹¹ one of the least affordable¹² in the world.

But as the retail¹³ sector¹⁴ continues to struggle in Hong Kong, there are growing concerns about a ripple-effect.

Still, the Hong Kong government has no reported plan to loosen its restrictions¹⁵, saying the city's Monetary Authority is still closely monitoring the property market, and says it will take steps to maintain the stability of the banking¹⁶ system, if necessary.