Zhongyuan Mortgage: Mortgage numbers maintain a soft trend in May, with the number of new mortgages in the first five months falling by 18.4% year-on-year, hitting a nearly 10-year low.

Wang Meifeng, Managing Director of Central Plains Mortgage, stated that according to the latest data released by Hong Kong mortgage securities companies, the mortgage insurance figures continued to be soft in May 2026. The number of new mortgage insurance policies in May decreased by 2.8% to 1,073 policies, while the amount of new mortgage insurance policies increased by 3.6% to HK$61 billion on a month-on-month basis. During the same period, the number of new mortgage withdrawals decreased by 10.5% to 471, and the amount of new withdrawals also decreased by 10.9% to HK$25 billion. The average amount of new mortgage loans taken was around HK$5.31 million, a decrease of HK$0.2 million or 0.4% compared to the previous month. Of these, 25% were for new properties and 75% were for second-hand properties. The data shows that in the first five months of 2026, there were 5,636 new mortgage insurance policies, amounting to HK$305 billion, representing a decrease of 18.4% and 12.0% respectively compared to the same period last year. The number and amount of policies were the lowest in the first five months of the year in nearly 10 and 9 years, respectively. As for the new mortgage withdrawals in the first five months, there were a total of 2,429 withdrawals, a decrease of 12.7% compared to the previous year, with the amount decreasing by 10.3% to HK$127 billion, marking the lowest in nearly 10 and 7 years respectively. Wang Meifeng pointed out that as the property market has returned to an upward trend, the trading of both new and second-hand properties has been strong. The overall number of residential property transactions in the first five months of this year reached 33,160, an increase of 44% compared to the same period last year. However, there has been a decrease in demand for mortgage insurance, with a decrease of 18% in the number of new mortgage insurance policies in the first five months compared to the previous year, hitting a 10-year low. This reflects the continuous reduction in market reliance and demand for high loan-to-value mortgage insurance, largely due to banks offering a full loan-to-value ratio of 70% and an increase in non-occupant property buyers (such as investors). Despite the year-on-year decline in mortgage insurance figures in the first five months of 2026, the overall mortgage insurance usage ratio remains relatively low. Wang Meifeng analyzed that with mortgage policies being fully relaxed to a 70% loan-to-value ratio, buyers can now purchase property with as low as a 30% down payment without the need for mortgage insurance, significantly reducing the reliance on high loan-to-value mortgage insurance and allowing more property buyers to proceed smoothly without insurance. This has led to a structural decrease in mortgage demand. The latest data shows that the usage ratio in April was 11.5% (the proportion of new mortgage insurance taken out compared to the total number of residential mortgages taken out), significantly lower than the previous peak of over 30% before the relaxation. Additionally, with a diversified source of buyers returning to the property market and an increase in the proportion of investors, the penetration rate of mortgage insurance remains at a low level, as properties intended for non-self-use are not eligible for high loan-to-value mortgage insurance.