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Press Releases

Residential Mortgage Survey Results for June 1997

New mortgage lending slowed slightly in June according to the results of the latest monthly survey conducted by the Hong Kong Monetary Authority ("HKMA"). However, the amount of outstanding loans continued the rapid growth of recent months.

Gross new loans decreased during the month by 2% to $25.5 billion. The average size of new loans decreased to $1.88 million compared with $1.91 million in May.

Repayment of loans however also dropped in June. As a result, the amount of outstanding loans increased by 2.7% to $379.6 billion in June, the same as the growth in May. The annualized rate of growth of outstanding loans in the three months to June increased to 35.8% from 30.0% in the three months to May. The average change over the last twelve months increased to 26.6% in June from 24.9% in May.

New loans approved during the month rose by 4.8% to $31.5 billion, in line with the revival of market activity in May after a relatively quiet month in April. New loans approved but not yet drawn also rose to a record high level of $20.4 billion.

"In the light of market conditions during the first half of the year, we have considered whether some additional tightening of lending criteria is required," said Mr David Carse, Deputy Chief Executive of the HKMA. "At present further tightening does not seem necessary, though it is not ruled out for the future. The market has cooled recently in the light of the Government's intention to increase the supply of residential property and to deal resolutely with speculation."

"What seems required at this stage therefore is that authorised institutions should strictly apply existing criteria, including those in respect of loan to value ratios, "top-up" loans, and debt servicing ratios," Mr Carse continued. "To this end, we have issued a letter to all authorised institutions reminding them of the key aspects of such criteria, and the fact that HKMA will take a serious view if institutions are not compliant."

The trend of price cutting continued in June. Of new loans approved during June, 31.8% were priced at best lending rate, compared with 18.0% in May. Loans granted at 0.25% above best lending rate dropped to 46.9% in June from 56.7% in May.

Gross loans for the purchase of properties in China decreased to $181 million in June from $228 million in May. The amount of outstanding loans increased by 1.14% to $6.75 billion.

The text of the HKMA's letter to authorised institutions is attached.

 

 

Residential Mortgage Survey Results for June 1997

33 Authorised Institutions

June-97
HK$m

May-97
HK$m

1. Gross new loans made during month

  1. Amount of new loans
  2. Monthly change in amount
  3. Number of new loans
  4. Average size of new loans
 

  1. 25,529
  2. -2.0%
  3. 13,561
  4. 1.88
 

  1. 26,047
  2. 14.7%
  3. 13,662
  4. 1.91
2. New loans approved during month

  1. Amount of approvals
  2. Monthly change in approvals
  3. Number of approvals
  4. Average size of approvals

    By Property age

    Property age - 15 years or below
    - amount
    - number
    Property age - above 15 years
    - amount
    - number
    Associated with co-financing schemes
    - amount
    - number

 

  1. 31,530
  2. 4.8%
  3. 15,778
  4. 2.00



    26,713
    12,661

    4,817
    3,117
     
    361
    145

 

  1. 30,082
  2. 4.6%
  3. 15,838
  4. 1.90



    25,029
    12,515

    5,053
    3,323
     
    462
    144

3. New loans approved during month but not yet drawn

  1. Amount of approvals
  2. Number of approvals
 

  1. 20,369
  2. 9,764
 

  1. 18,946
  2. 9,810
4. Amount of outstanding loans

  1. Amount of loans
  2. Monthly change in loans
  3. Twelve-month change in loans
  4. Average monthly changes over

    last three months (annualized)
    last twelve months (annualized)

    Associated with co-financing schemes
    - amount
    - number

 

  1. 379,607
  2. 2.7%*
  3. 26.1%*

  4. 35.8%*
    26.6%*

     
    13,781
    7,086

 

  1. 371,783
  2. 2.7%*
  3. 24.4%

  4. 30.0%
    24.9%

     
    13,835
    7,126

5. Interest margin on new loans approved during month

  1. More than 0% and up to 0.25% above BLR
  2. More than 0.25% and up to 0.5% above BLR
  3. More than 0.5% and up to 0.75% above BLR
  4. At BLR
  5. Others
 

  1. 46.9%
  2. 10.5%
  3. 3.5%
  4. 31.8%
  5. 7.3%
 

  1. 56.7%
  2. 13.3%
  3. 4.9%
  4. 18.0%
  5. 7.1%
* Figures are adjusted for the effect of securitisation of residential mortgage loan by an institution amounting to HK$2.322 billion

 


RESIDENTIAL MORTGAGE LOANS IN HONG KONG
(33 institutions)

 


GROSS NEW LOANS MADE DURING THE MONTH

0728a1

0728a2

 


NEW LOANS APPROVED DURING MONTH

0728b1

NEW LOANS APPROVED BUT NOT YET DRAWN


0728b2

 




0728c1

Remarks: The significant fall of outstanding balance in December 1994 was due to the effect of reclassification, securitization and sale of loans by some institutions.


0728c2

0728c3

Hong Kong Monetary Authority
28 July1997

Last revision date: 1 August 2011
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