Authorities insist there is still keen demand for housing, citing a low vacancy rate for private flats, in response to a market report suggesting the city's home market is on the decline due to a supply glut.

In a statement on Thursday, an SAR government spokesman added delinquent residential mortgages remained at an extremely low level, and that banks are mitigating their credit risks.

The comments were in response to an S&P report on Hong Kong's banks and property market.

"We disagree with the observation that there is an oversupply of residential properties," the spokesman said.

"As of the end of last year, the vacancy rate for private homes stood at 4.5 percent, in line with the average between 2004 and 2023.

"Rents also keep going up, reflecting keen housing demand."

As for delinquent residential mortgages, only 0.12 percent of all loans drawn were overdue as of end-January.

"Under the Monetary Authority's counter-cyclical measures, the city's average residential mortgage rate remained solid at 60 percent, while the debt-servicing ratio, at 40 percent, was also low," the statement read.

The spokesman added it agreed with the report's view that Hong Kong's banking sector can withstand "strains arising from the commercial real estate" sector, saying loans are diversified and institutions have taken measures to mitigate risks.