Secured Consumer Lending in Hong Kong Saw Double-Digit Growth in Q4 2025
- Mortgage and auto lending drove renewed credit momentum
- Credit card and personal loan balances remained resilient through selective borrowing
Hong Kong’s consumer credit market remained resilient with growth momentum anchored in secured lending in Q4 2025, as both mortgage and auto loan portfolios expanded. Credit card balances rose on the back of higher utilisation, with retail sales in Hong Kong recording continued growth over the second half of the year1.
These insights and others are shared in the TransUnion (NYSE: TRU) Hong Kong Industry Insights Report for Q4 20252. The report further showed that while consumers held fewer credit products, they used those existing products more actively, placing greater emphasis on product fit, pricing and ongoing engagement. Market growth across categories was shaped less by new account acquisitions (supply) and more by consumers’ needs and priorities (demand).
Mortgage Market Shows Clear Signs of Rebound
The mortgage market displayed early recovery signals in Q4 2025, supported by the current low Hong Kong Monetary Authority base rate. The number of active mortgage accounts increased 3.6% year-over-year (YoY), reflecting a recovering housing market and improving borrower confidence. Origination volumes during Q3 20253 jumped 44.1% YoY, off relatively low volumes in the corresponding 2024 quarter, indicating a meaningful re‑acceleration in new lending. This is supported by data from Centaline Property that shows the number of private primary residence transactions more than doubled YoY during Q3 2025, and that the number of private secondary residential transaction increased by 55% YoY4.
Despite overall growth, mortgage lending remained conservatively positioned, with low-risk super prime5 consumers holding 67.2% of all mortgage accounts, slightly higher than the previous year. Higher‑risk exposure stayed minimal.
Among generational cohorts, the greatest growth in originations was among Gen Z6 and Baby Boomer consumers, at 1.6% and 5.7% YoY, respectively. Originations by Millennial and Gen X consumers declined by 5.9% and 1.4% YoY, respectively.
“Mortgage activity is recovering in a healthy and disciplined way and is likely to see further activity based on improved affordability as a result of the Hong Kong Monetary Authority’s current lower base rate environment. Lenders could benefit from predicting their customers’ needs for a new mortgage or a refinance activity by better understanding shifts in holistic consumer repayment, leveraging and borrowing behaviours.” said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion.
Auto Loan Growth Driven by Wider Borrower Participation
The auto loan sector continued to expand, with originations during Q3 2025 increasing 28.2% YoY, reflecting improved demand for vehicle financing. This was likely driven by the Hong Kong government’s One-for-One Replacement Scheme7 which is currently set to end on March 31, 2026, in support of its target of ceasing new registrations of fuel-propelled cars, including hybrid vehicles, by 2035 or earlier8. The number of electric vehicles purchased during Q3 2025 was nearly double the number purchased in the same quarter in 20249.
Although super prime borrowers still dominate new auto loans (51.7% of originations), their share declined slightly, down from 53.6% in the prior year, as more near prime and subprime consumers entered the market – near prime originations increased from 10.9% to 14.7% and subprime originations increase from 1.0% to 2.9%. These increases led to smaller average new loan values and reinforce the importance of risk based pricing and tight portfolio monitoring.
The total number of open auto accounts grew 21.8% YoY during Q4 2025, while the number of consumers carrying an auto loan increased 22.5% YoY. Outstanding auto loan balances rose 14.8% YoY, even as the average balance per consumer fell 6.1% YoY, confirming that expansion is being driven by both increased participation and balance growth.
“The auto loan market continued to scale as more consumers felt confident opening loans to purchase vehicles — primarily fuelled by government support. While the latest 2026-27 Budget has announced the conclusion of the One-for-One Replacement Scheme, this may further stimulate market demand in the first quarter of 2026, and future growth in auto loans will depend on the introduction of potential new incentives,” said Sun.
Credit Card Growth Reflects Higher Utilisation and Portfolio Consolidation
The credit card market showed utilisation‑led balance growth in the context of consistently growing retail sales, which recorded YoY increases of 5.3%, 4.4% and 5.1% in October, November and December 20251. While the number of active credit card accounts declined modestly by 1.5% YoY, outstanding balances rose by 2.5% YoY. Consumers’ average credit limits fell slightly by 3.4% YoY, largely due to the roll‑off of closed or inactive accounts rather than broad-based tightening by card issuers.
The number of consumers with active credit card accounts and those carrying balances increased by 0.57% and 0.81% YoY, respectively, highlighting deeper engagement with preferred card products.
“Top‑of‑wallet relevance has never been more critical for Hong Kong card issuers,” Sun said. “Balance growth is increasingly determined by whether a card is central to a consumer’s everyday spend, rather than by the number of accounts they hold. Lenders can maintain their top-of-wallet position through proactive strategies designed to encourage consumer loyalty, especially as their needs change with economic cycles.”
Personal Loans Show Steady, Risk‑Segmented Expansion
The unsecured personal loans market recorded modest growth across accounts, balances and active borrowers. The number of accounts rose 0.9% YoY and outstanding balances increased 2.9% YoY in Q4 2025. Average balances per consumer climbed 1.8% YoY, indicating steady demand for instalment credit without signs of rapid acceleration.
Origination patterns in Q3 2025 continued to lean toward near prime and subprime borrowers, who accounted for 47.5% and 28.3% of originations, respectively. Average new account balances rose 7.5% YoY in Q4 2025, as larger loan amounts indicated widening appetite from traditional banks to offer this product.
“The unsecured personal loans market is expanding in a measured way, with higher‑risk tiers driving much of the growth,” Sun said. “Disciplined risk‑based pricing and close monitoring of subprime performance remains important, particularly as higher average loan sizes in new originations increase potential loss exposure.”
Q4 2025 Metrics for Consumer Credit Products in Hong Kong
Credit product | Q3 2025 (i) originations – annual change | Outstanding balances – annual change | Account-level serious delinquency rates (ii) (iii) | Account-level serious delinquency – annual change (basis points) |
Mortgage | 44.1% | 2.5% (iv) | 0.05% | -1 bps |
Auto loan | 28.2% | 14.8% | 0.20% | 4 bps |
Credit card | 2.4% | 2.5% | 0.03% | 1 bp |
Personal loan | 2.6% | 2.9% | 0.83% | 1 bp |
i. Originations are viewed one quarter in arrears to account for reporting lag.
ii. Serious-delinquency rates are 90 or more days past due for credit cards and 60 or more days past due for all other credit products.
iii. Delinquency data are reported at an account-level up to 150 days past due, excludes 150+ days past due and charge-offs.
iv. Source: HKMA Residential Mortgage Survey
Despite some structural shifts, credit quality remains resilient across the system, with delinquency rates stable or improving across most products. Where pressure exists, it remains limited and concentrated in subprime segments.
“Hong Kong is entering a phase of optimisation rather than broad-based expansion,” said Sun. “We saw lenders ending 2025 by optimising their portfolios, positioning them well for growth in 2026. Going forward, they will need to focus on strategic capital allocation, defending top‑of‑wallet positions and maintaining disciplined risk management as portfolios rebalance.”
