HKMA said in a statement on Tuesday its survey estimated 12,164 cases of negative equity at the end of December, the highest since the first quarter of 2005.

The cases involved HK$66.3 billion, compared with 533 cases and HK$3 billion at the end of September.

HKMA deputy chief executive Arthur Yuen Kwok-hang assured the market that the risks in banks' mortgage business are controllable, because the loan quality under the mortgage insurance program - which has a higher loan-to-value ratio - is still very good, registering only 0.01% delinquency ratio.

Home prices in the city fell 15.6% in 2022 in the first annual drop since 2008, official data showed last week.

Prices eased 7.7% in the fourth quarter, following a 8.5% fall in the third quarter, weighed down by a weak economic outlook and rising mortgage costs, after a COVID-19 outbreak at the beginning of the year.