Mortgage loan growth among Asia-Pacific covered bond issuers is likely to slow in 2026 due to interest rate cuts and tighter regulatory measures in some markets, according to Fitch Ratings.
The agency noted that housing policies vary across Australia, New Zealand, Singapore, and South Korea. Some markets have eased lending rules for first-time buyers, while others have introduced stricter tax measures to discourage property speculation, based on a 12 March 2026 non-rating commentary.
Despite these shifts, changes in rate cycles and policy frameworks are expected to have only a limited effect on the flow of new mortgage lending.
Fitch said the evolving interest-rate environment and prudential measures should have minimal impact on the volume of eligible cover assets for APAC programmes. These assets are expected to continue supporting programme stability through rate-cycle transitions, particularly by maintaining sufficient overcollateralisation and enabling ongoing asset replenishment.
Eligible cover assets—mortgages that meet specific criteria for inclusion in a cover pool—rose across APAC in 2025. This growth increased the pool of unencumbered assets available to back outstanding covered bonds and potential new issuances, largely supported by improved mortgage affordability as rates declined.
Based on mortgage data, annual asset growth reached 5.7% in Australia and New Zealand, about 4% in Singapore, and 5.9% in South Korea.
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