TransUnion Survey Reveals Hong Kong Consumers are Experiencing a Positive Change in Household Income with Optimism in the Future
- Thirty-eight percent of surveyed Hong Kong consumers experienced an increase in household income in the past three months across all income brackets
- Close to half (46%) are optimistic about their household finances in the next twelve months
- Two in five (41%) intend to apply for new credit or refinance existing credit
Global information and insights company and Hong Kong’s leading credit reference agency, TransUnion (NYSE: TRU), today released its latest quarterly Consumer Pulse Study for Q4 2023. It reveals Hong Kong consumers have emerged from the pandemic shadow with a positive change in household income over the previous quarter in general and are optimistic about their income looking ahead to 2024.
The new survey conducted in October 2023 found a large group of Hong Kong consumers experienced an income increase in the last three months regardless of income level. Overall, 38% of surveyed consumers reported that their household income had increased, up 17 percentage points from Q4 2022, indicating widespread financial improvement. Additionally, a similar percentage of respondents said their current household finances are better than planned (39%) or as planned (38%) in the past three months.
Rising incomes benefit Gen Z and Gen X the most
Looking across generations, the improvement in income was felt most strongly by Gen Z and Gen X respondents. More than half (57%) of surveyed Gen Z consumers reported an income increase in the past three months, up 19 percentage points compared to the same period last year. Forty-four percent of Gen X respondents also experienced a rise, which is a 30% year-on-year (YoY) increase. Both Millennials and Baby Boomers also enjoyed rising incomes but the rise was lower YoY (32% vs. 25% and 15% vs. 8%, respectively).
Despite the positivity, around a quarter (26%) of those surveyed still expressed concerns about meeting their bill and loan obligations. To navigate these financial hurdles, 40% of surveyed consumers said they had cut back their discretionary spending in the last three months. Additionally, 45% are concerned about inflation. These data show that taking cautious approach towards financial management amidst evolving economic conditions is still a priority for many. In an effort to alleviate some of these consumers constraints, the government announced additional financial relief in its latest Policy Address[1], such as reducing or exempting stamp duties for certain types of property buyers and distributing HK$20,000 to parents with newborns.
Consumer optimism towards household finance in 2024
The survey indicates a general optimism among Hong Kong consumers on their income level in 2024. Close to half (46%) of consumers surveyed are optimistic about their household finances in the next twelve months, which is a 10 percentage point YoY increase. On expected income levels next year, 43% expect a rise while the same percentage predict their current level of income could be maintained. Across generations, Gen Z are the most optimistic with more than two-thirds (68%) expecting a positive 2024, up 19 percentage points YoY.
"As 2023 draws to a close, it has been a year when Hong Kong citizens emerged from the pandemic shadow with visible household income rises and optimism looking ahead to next year. Strong momentum among Gen Z suggests a brighter future for the financial sector and society, as they are the new growth engine in the Hong Kong economy,” said Weihan Sun, Principal of Research and Consulting for Asia Pacific at TransUnion.
Consumers value credit products but application challenges hinder access
The survey also discovered a positive shift in attitudes towards accessing new credit. Forty-one percent of respondents said they plan to apply for new credit or refinance existing credit which is a 10 percentage point increase YoY. This is being considered most strongly among Gen Z (56%) and Gen X (47%) ahead of Millennials (37%) and Baby Boomers (14%).
Findings show encouraging market signals that consumers recognise the importance of credit and lending products in achieving their financial goals. Nearly half (49%) think access to credit and lending products are very important – up from 42% in Q4 2022 – while around one fifth (18%) said it is extremely important. This recognition is once again stronger among Gen Z and Gen X at 62% and 51% respectively, compared to less than half (46%) of Millennials and about one-third (34%) of Baby Boomers. However, barriers like high costs, cumbersome processes and fear of rejection deterred 40% of respondents from applying, revealing an area that may need addressing to further enhance financial inclusion.
“As consumers, especially Gen Z, increasingly recognise the importance of credit in healthy financial management and expressed their interest in obtaining more credit products, financial institutions must seize the market momentum for proactive customer acquisition and upselling. This requires addressing the conventional challenges associated with credit application. Only by leveraging advanced analytics, modelling and technologies, institutions can stay ahead of consumer preferences and promptly respond to the growing and evolving market demand,” added Sun.
TransUnion’s Consumer Pulse Study surveyed 925 consumers in Hong Kong during October 3–12, 2023. This quarterly study examines shifting consumer attitudes and behaviours based on the dynamics of income, debt, and identity theft, with respondents ranging from Gen Z (born 1995-2004), Millennials (born 1980-1994), Gen X (born 1965-1979), and Baby Boomers (born 1944-1964). For more information, please view the full report of the Consumer Pulse Study Q4 2023.
