Hong Kong consumers struggle with bills and loans despite rising incomes, TransUnion says
An increasing number of consumers in Hong Kong are finding it difficult to cover their monthly obligations even as their incomes continue to rise, according to a study.
A quarter of Hongkongers said they are no longer able to pay at least one of their current bills and loans in full, compared with 17 per cent a year earlier, according to the report by credit reference agency TransUnion on Wednesday.
The report highlighted growing anxiety about financial stability among consumers, noting that this could be influenced by external economic factors such as inflation and market fluctuations.
TransUnion’s third-quarter consumer pulse report surveyed 860 adults aged 18 and above, between July 16 and 29.
“Although the Hong Kong Monetary Authority [HKMA] has recently reduced the city’s base rate following the decision of the US Federal Reserve, consumers will need to remain resilient and patient until potential further cuts to make the cost of credit more manageable, particularly for borrowers who are struggling,” the report said.
While the HKMA reduced rates by 50 basis points, top lenders including HSBC cut their prime lending rates by only 25 basis points. The cuts translate to savings for borrowers who tie their loans to prime rates. For a typical HK$5 million (US$640,000) loan of 30 years, a quarter-point cut in prime rates will save mortgage borrowers HK$720 per month.
