Residential Mortgage Survey Results for November 2003

New mortgage lending increased at a slower pace in November, according to the HKMA's monthly survey of residential mortgage lending.

New loans drawn down during the month increased by 5.1% to HK$8.9 billion following the strong growth of 45% in October. However, loans approved during the month fell by 22.8% to HK$8.1 billion, mainly owing to a 33.9% fall in approvals for primary market transactions. The number of new applications for mortgages also fell, by almost a quarter.

The proportion of new approvals priced at more than 2% below the best lending rate decreased to 93.8% from 94.2% in October but the proportion at more than 2.5% below the best lending rate increased further to 65.9%.

The outstanding amount of mortgage loans increased further by 0.2% to HK$522.3 billion.

The quality of the mortgage portfolio improved further as indicated by the decline in both the mortgage delinquency ratio and the rescheduled loan ratio to 0.97% and 0.54% respectively from 0.99% and 0.56% in October. As a result, the combined ratio improved to 1.51% from 1.55%.

"Mortgage lending remained reasonably buoyant in November," said Mr Y. K. Choi, Acting Deputy Chief Executive of the HKMA. "The continuing improvement in the asset quality of the mortgage portfolio is welcome, although asset quality still needs to be watched carefully."

New loans drawn down for purchasing properties in Mainland China increased to HK$217 million. The amount of outstanding loans at end of the month was HK$6.5 billion.

For further enquiries, please contact:

Jasmin Fung, Manager (Press), at 2878 8246 or
Kevin Ip, Manager (Press), at 2878 1687

Hong Kong Monetary Authority
30 December 2003

Annex

Residential Mortgage Survey

Notes to Annex

1. The Residential Mortgage Survey is a continuous monthly survey covering 25 authorized institutions in the banking industry.
2. Residential mortgage loans (RMLs) in this survey are loans (including refinancing loans) to private individuals for the purchase of residential properties, including uncompleted units, but other than those properties under the Home Ownership Scheme, the Private Sector Participation Scheme and the Tenants Purchase Scheme.
3. Gross new loans made are new mortgage loans drawn down during the surveyed month.
4. New loans approved are mortgage loans approved during the surveyed month. The loans can either be drawn down in the same month or in the following months. Loans that are approved but not yet drawn, which have implications for the amount of gross new loans made in the following months, are shown under the item "New loans approved during month but not yet drawn".
5. Delinquency ratio is measured by a ratio of total amount of overdue loans to total outstanding loans.
6. Rescheduled loan ratio is measured by a ratio of total amount of rescheduled loans to total outstanding loans.
7. Co-financing schemes refer to those schemes that involve provision of top-up finance by property developer(s) or other co-financier(s) in addition to mortgage loans advanced by authorized institutions. For loans associated with co-financing schemes, only the portion of loans advanced by reporting institutions is included in this survey.
8. Average loan-to-value ratio and average contractual life for new loans approved during the surveyed month are average figures weighted by the amount of new loans approved during the surveyed month by individual reporting institutions.
9. Loans written off over the past 12 months as a percentage of the average outstanding loans is calculated as: total value of loans written off during the past 12-month period as a percentage of the average outstanding loan value over the 12-month period [i.e. (opening + closing), 2].