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Bond Market News
Hong Kong Real Estate Industry Association Calls for HKD 20bn ($2.6bn) Support Fund
September 18, 2025
A real estate industry association in Hong Kong is urging the government to set up a HKD 20bn ($2.6bn) fund to invest in distressed properties to help prevent systemic financial risks, according to reports. Hong Kong’s commercial real estate slump is causing a surge in non-performing loans, forced asset sales and liquidity challenges for developers and investors, a representative of the CRECCHKI said. If the situation continues, it will threaten Hong Kong’s standing as an international financial center, the association said. It is believed that the association counts real estate investors, fund managers and property developers as its members, including Hongkong Land Holdings Ltd., Link Asset Management Ltd. and Sino Land Co.
The city’s soured loans rose to $25bn at the end of March to a two-decade high, making up 2% of the total, Fitch estimates, based on HKMA figures. That number may climb to 2.3% by year-end, the biggest jump in APAC, and loan quality is likely to worsen further through 2026, according to Fitch. Prices of office units and retail space in Hong Kong plunged by 48% and 41% respectively, from their 2018 highs, according to government data, wiping the value of collateral backing many bank facilities.
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