Although the property market in Hong Kong has long been characterized by exorbitant pricing and a scarcity of available land, major banks still have a lot of faith in it. Financial institutions continue to see real estate as one of the most reliable long-term assets in the area, notwithstanding discussions surrounding the explanation of the housing crisis in Hong Kong. Even as concerns about why housing in Hong Kong is so costly and how the city’s housing situation will change in the upcoming years grow, this optimism is unwavering.

The ongoing scarcity of suitable land is one of the factors contributing to Hong Kong’s high housing costs.
Banks are aware that limited supply keeps deep crashes from happening, especially during economic downturns.

3. Support from the Government and Stability of Policy

The government of Hong Kong is still implementing supply-side reforms and housing regulations.
Banks are reassured about long-term regulatory stability as a result.

Regulations That Encourage Confidence

Programs for the sale of land

Extension of public housing

Market-cooling strategies

Domestic housing continues to be a safe haven for financial institutions, despite the fact that Hong Kong banks’ bold wager on the mainland is failing in some areas.

4. High Demand from Customers and Urban Development

Strong consumer demand is sustained by urbanization and changes in lifestyle.
Banks note that despite Hong Kong’s housing crisis, locals continue to see property ownership as crucial.

Trends in Demand

Millennials looking for their first homes

Families moving into bigger apartments

Foreign investors joining the market

5. Stability of Mortgages and Low Default Rates

Because Hong Kong has one of the lowest mortgage default rates in Asia, banks have faith in the housing market.
Strict lending guidelines reduce risk.

The Reasons for Low Defaults

High savings within the household

Loan-to-value ratios that are conservative

stable employment sectors

Although the property market in Hong Kong is still costly and difficult, big banks are committed because to its stability, robust demand, and government-backed framework. Property is still a key component of banking confidence even as the city works to resolve its housing issue.

For more details, check out our exclusive interview with Joaquim Fernandes