Debt use surges in Hong Kong, driven by lifestyle and property spending

Hongkongers obtained loans ranging from $93,000-$1m for lifestyle-related expenses.

Hongkongers continue to leverage debt for lifestyle and property-related spending despite high interest rates, digital loan matching platform Lendela reported.

According to Jeremy Giraldo-Tong, general manager of Hong Kong at Lendela, from 2022 to 2024, Hongkongers primarily borrowed for lifestyle-related expenses like vacations, hobbies, and cars, followed by credit card-related expenses and home-related costs, including renovations and property purchases.

Paying bills and consolidating debt were also reasons for incurring debt amongst Hongkongers.

In 2024, borrowers sought larger loans to consolidate debts, averaging $230,000 to $1m, with one in five applying, marking a 12% YTD increase.

Following this, managing credit card spending saw one in five borrowers taking out loans from $150,000 to $1m, marking an 18% YTD increase. 

Lifestyle-related expenses came next, with three in five securing loans ranging from $93,000 to $1m, up 14% YTD.

In addition, 1 in 4 borrowed for home-related expenses, with loans ranging from $74,000 to $1m, reflecting an 18% YTD increase in applications, whilst 8% took loans to pay bills, ranging from $50,000 to $1m, up 16% YTD.

Compared to 2023, borrowers in 2024 had significantly lower average maximum loan amounts.

In 2023, borrowers who loaned for lifestyle-related expenses had an average loan size of $88,000 to $2.5m, increasing 47% YoY, while debt consolidation loans ranged from $216,000 to $3.5m, up 37% YoY.

Moreover, 2023 saw significant YoY increases, with credit card management loans up 105%, home-related loans rising 33%, and bill payment loans increasing 44%.

Meanwhile, data for 2022 revealed that over 50% of borrowers took out a loan for lifestyle-related expenses, whilst 30% borrowed for home-related expenses.

For this period, debt consolidation loans saw the highest increase of 97% YoY, followed by credit card management loans increasing 83% YoY, lifestyle-related loans (34%), bill payments loans (30%), and home-related loans (29%).