Survey Shows Hong Kong Consumers Increased Openness to Lending in 2021

Impact of the pandemic on household income reduced by 13 percentage points from Q3 to Q4 2021, with 70% of Hong Kong consumers saying their household income was currently unaffected
Changing macroeconomic environment and consumer habits redefine attitudes to lending. Majority of consumers (65%) believe in the importance of credit and a similar number (61%) say they have sufficient access

The leading global information and insights company TransUnion (NYSE: TRU) announced the Q4 results from its quarterly Consumer Pulse Survey, revealing a continuation in improving consumer sentiment. In Q4 2021, Hong Kong consumers reported a reduced impact of the COVID-19 pandemic on household incomes compared to the previous quarter. Almost a third (30% – 13 percentage points lower than Q3) of consumers reported their household incomes continued to be impacted, while 68% were optimistic about their finances in the next 12 months, up 26 percentage points from Q3.

The latest Q4 Consumer Pulse Survey polled 1,100 Hong Kong consumers between November 1-18, 2021. During the period, there was no record of locally transmitted Omicron case. The comparison periods are Q3 (survey conducted between August 16-31, 2021) and Q1 (survey conducted between March 5-22, 2021).

Consumer sentiment continued to be driven by economic growth

Over the survey period government figures show Hong Kong’s real GDP growth stood at 5.4% year-on-year and the second installment of the consumption voucher scheme was issued in October¹. Both appear to have had a positive impact on results. Seven in 10 (70%) of those taking part in the survey reported their household income was largely unaffected by the pandemic, a 26 percentage points increase compared to the start of the year. The outlook was also increasingly positive with only 43% of respondents expecting household income to be negatively impacted in the future – five percentage points lower than Q3 and 17 percentage points lower than Q1.

Nearly half of consumers (49%) increased their household spending budget – 13 percentage points higher than Q3. In addition, 70% planned to spend the same or more over the festive holiday season compared to the previous year, and 82% expected to maintain or increase their online transactions over the next three months. One-third (33%) of respondents saved more for retirement, which was a 10 percentage points quarter-on-quarter increase.

Confidence in meeting financial obligations has also improved, particularly in comparison to Q1. More than three quarters (78%) said they would be able to pay their bills or loans in full – up 12 percentage points from Q1. Of those who would not be able to meet their obligations, fewer planned to dip into their savings (down three percentage points) or borrow money from friends or family (down 10 percentage points) and instead seek out more flexible options from lenders. Almost a quarter (24%) planned to pay a partial amount (up two percentage points), 18% planned to utilize payment holiday or other accommodation (also up two percentage points), and 17% plan to refinance payments (up four percentage points).