Rising Incomes Fail to Alleviate Financial Stress for Hong Kong Consumers, Reveals TransUnion Study

Despite increasing earnings, Hong Kong residents are grappling with debt and bill payments, according to TransUnion. It appears that the heightened income levels are not alleviating financial pressures, as one in four individuals are failing to completely meet their bill obligations.

A growing proportion of Hong Kong consumers are struggling to meet their monthly financial commitments despite a rise in their earnings, a study suggests.

One fourth of residents in Hong Kong have expressed their inability to fully pay at least one of their existing bills or loans, a noticeable increase from 17% the previous year, as revealed in Wednesday's report by the credit monitoring firm, TransUnion.

The study underscores increasing worry regarding fiscal security among buyers, pointing out that this could be swayed by outside economic elements like inflation and market volatility.

The third-quarter consumer pulse report of TransUnion gathered data from 860 adults, aged 18 or older, during the period from July 16 to 29.

The Hong Kong Monetary Authority (HKMA) has lately decreased the city's benchmark rate in response to the US Federal Reserve's decision. However, the report states that consumers must stay strong and patient for possible additional reductions to make credit costs more bearable, especially for those borrowers who are finding it difficult to cope.

The Hong Kong Monetary Authority (HKMA) has slashed rates by 50 basis points, however, leading banks like HSBC have only decreased their prime lending rates by 25 basis points. This reduction will result in financial benefits for borrowers whose loans are linked to prime rates. For instance, a standard 30-year loan of HK$5 million (US$640,000) will see a monthly savings of HK$720 for mortgage borrowers, following a quarter-point reduction in prime rates.