More than a third of HK consumers say their income increased in the last three months

This marks a seven-percentage point year-over-year (YoY) jump from Q3 2023.

More than a third of Hong Kong consumers have said that their household income had increased in the last three months, according to TransUnion’s Consumer Pulse Study for Q3 2024. 

This marks a seven-percentage point year-over-year (YoY) jump from Q3 2023.

This is most pronounced amongst Gen Z consumers, with 55% indicating an increase in income, compared to 45% in Q3 last year. 

At the same time, this age group showed a significant drop from 41% to 30% from Q3 2023 to Q3 2024 in those who reported their income stayed the same in the past three months. 

Looking ahead, 42% of all respondents also anticipate that their income will increase over the next 12 months, up by seven percentage points YoY.

Conversely, the percentage of consumers expecting an income decrease in the next year dropped three percentage points YoY to 15%.

Cautious optimism with mixed sentiment

Despite the positive sentiments about income, Hong Kong consumers have also expressed mixed views about their financial outlook, with one quarter (25%) in Q3 2024 saying they won’t be able to pay at least one of their current bills and loans in full, up from 17% YoY. 

The report noted that inflation for everyday goods is the leading household financial concern for the next six months, with 60% citing it in their top three, followed by a recession (58%) and jobs (49%). 

Moreover, 44% of those surveyed believe Hong Kong is currently in a recession, a five-percentage point increase from the previous quarter.

With concerns around recession and inflation high, 39% of consumers said they saved more in an emergency fund and 23% increased their retirement savings in the past three months, indicating a shift towards prioritising financial security amidst uncertainty. 

Consumers also anticipate more controls in spending, with 40% saying that they plan to reduce discretionary spending such as dining out, travel, and entertainment. This sentiment is reflected in a 10% YoY decline in business for Hong Kong restaurants during this year’s Mid-Autumn Festival. 

Stronger credit demand anticipated

Consumers expressed higher interest in credit in Q3 2024, with 38% of respondents saying that they plan to apply for new credit or refinancing existing credit, in the next year, compared to 35% in Q3 last year. 

Amongst those who plan to apply for new credit or refinancing existing in the next year, 45% said they’ll apply for a new credit card, and 23% will request an increase in available credit for an existing credit card. 

More than one-third (34%) also said they’ll apply for a new personal loan, and 18% are planning to refinance a personal loan. 

Gen Z showed the strongest appetite for credit, with 48% saying they’ll apply for new credit or refinance existing credit in the next year, whilst 41% of Millennials, 38% of Gen X, and only 13% of Baby Boomers expressed similar plans. 

The demand for new mortgages also increased in Q3 2024 compared to the same time last year, with 20% saying they plan to apply for a new mortgage, up from 14% a year ago and from 13% in Q2 2024.

Despite this appetite for credit, in Q3 2024, 34% of consumers said they considered applying for new credit or refinancing existing credit but ultimately decided not to, an increase from 30% a year ago. 

The reasons for this abandonment are multifaceted, with 26% citing the cost of new credit or refinancing being too high, another 26% indicating that it takes too long to get a decision, and similarly, 26% saying it took too much work to apply. 

Additionally, 24% of respondents reported finding an alternative funding source.