Hong Kong Mortgage Applications Drop 7.5% in April 2026

The Hong Kong Monetary Authority (HKMA) reported a 7.5% month-on-month decline in mortgage applications for April 2026, with total applications dropping to 9,541. This marks a reversal from the sharp 26.9% surge in March. Mortgage loans approved fell even more sharply, down by 9% to HK$36.5 billion, according to the HKMA’s latest Residential Mortgage Survey.

Breaking down the data, primary market mortgage financing took the biggest hit, plummeting 20.3% to HK$10.7 billion. Secondary market financing saw a smaller decline, down 6.7% to HK$21.8 billion. Refinancing, however, bucked the trend, rising 21% month-on-month to HK$4 billion. Mortgage drawdowns—an indicator of closed deals—dropped 16.1% to HK$22.6 billion.

Notably, the proportion of new loans tied to the Hong Kong Interbank Offered Rate (HIBOR) dropped from 83.7% in March to 77.8% in April, reflecting shifting borrower preferences amid a stabilizing interest rate environment. Loans priced against best lending rates also dipped slightly, from 1.5% to 1.3% of new originations.

Market Context: Cooling After March Surge

The April pullback comes after a strong March, when mortgage applications and approvals surged by 26.9% and 38.6% respectively, driven by improved affordability, lower retail mortgage rates, and the reintroduction of fixed-rate mortgage products. Borrowing costs, including 1-month HIBOR, have stabilized in the 1.95%–2.35% range, and retail mortgage rates have fallen to around 3.25%–3.5%, down from over 5% in previous years.

However, April’s data suggests some cooling in transaction momentum, particularly in the primary market. Developers may be moderating their sales incentives after an aggressive push earlier in the year. Additionally, while Mainland Chinese buyers snapped up 1,892 homes in Hong Kong in April—the highest monthly figure in two years—this activity appears to have concentrated in secondary market transactions rather than new developments.

Structural Trends in 2026

Despite April’s slowdown, Hong Kong’s mortgage market shows signs of recovery overall. Private home prices have risen steadily, with the official Private Home Price Index hitting 307.6 in February 2026, up 1.6% month-on-month and 7.7% year-on-year. Total residential transactions are projected to reach 65,000–70,000 units this year, according to CBRE.

Policy measures have also played a role in stabilizing the market. The March 2026 adjustment to stamp duty aimed at luxury properties left the mass market largely unaffected, supporting core demand. Additionally, fixed-rate mortgage products are gaining traction, providing more predictability for homebuyers in a still-uncertain macroeconomic environment.

Outlook

While April’s decline in mortgage activity signals a brief pause in momentum, the broader market dynamics—rising home prices, improving affordability, and strong cross-border demand—point toward ongoing recovery in 2026. The HKMA’s data for May and June will be closely watched to determine whether April’s dip is an outlier or the start of a broader trend.

For now, the low mortgage delinquency ratio of 0.12% and stable rescheduled loan levels suggest that Hong Kong’s housing market retains a solid foundation amid cyclical fluctuations.

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