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Press Releases

Residential Mortgage Survey Results for February 1999

New mortgage lending continued to decline in February, according to the HKMA's monthly survey of residential mortgage lending. This partly reflected seasonal factors associated with the Lunar New Year holiday.

The amount of gross new loans made in February decreased by 16.1% to $7.2 billion from $8.6 billion in January (compared with the 35.3% decrease in January). The average size of new loans increased to $1.46 million in February from $1.42 million in January.

New loans approved during the month fell by 15.6% to $8.0 billion ($9.4 billion in January). Loans approved during the month but not yet drawn also decreased by 13.4% from $7.1 billion in January to $6.2 billion in February.

The average loan-to-valuation ratio of new loans approved was 57% (56.3% in January) and the average contractual life was 212 months (213 months in January). 99.4% of these loans were related to owner-occupied properties.

Reflecting the subdued market conditions in February, the amount of outstanding mortgage loans increased at a slower rate of 0.35% in February, compared with 0.37% growth in January. The annualised rate of growth of outstanding loans in the three months to February decreased to 7.9% from 11.0% in January. The average change over the last twelve months decreased to 8.8% from 9.2% in January.

The loan delinquency ratio (measured by the ratio of mortgage loans overdue for more than 3 months to total outstanding mortgage loans) rose to 1.07% as at February 1999 (compared with 0.96% in January).

On the pricing front, mortgage rates eased further with 70.3% of the new loans granted at the best lending rate plus 0.25% or below (compared with 50.9% in January). In particular, the portion of new loans granted at the best lending rate rose to 33.7% in February from 20.9% in January.

"The continuing decline in margins in February reflects active competition not only in the primary market but also in the secondary market. It is important in these circumstances that banks do not relax their prudent lending criteria," said Mr. David Carse, Deputy Chief Executive of the HKMA.

Gross loans for the purchase of properties in Mainland China decreased from $62 million in January to $18 million in February. The amount of outstanding loans decreased slightly by 1.55% to $7.44 billion.

* * More Informations about Residential Mortgage Survey Results

Hong Kong Monetary Authority
23 March 1999

 

Notes to Annex

1. Residential mortgage loans in the survey refer to loans (which include refinancing loans) to private individuals for the purchase of residential properties, including uncompleted flats, but excluding flats in the Home Ownership Scheme, Private Sector Participation Scheme and Tenants Purchase Scheme. Mortgage loans to corporate clients are excluded from the survey.

2. Gross new loans made refer to mortgage loans which are actually drawn down during the month.

3. New loans approved refer to mortgage loans which are approved during the month. The loans can either be drawn down in the same month or in the following months. The loans which are approved but not yet drawn down are shown under the item "New loans approved during month but not yet drawn". This figure will have implications for the amount of gross new loans made in the following months.

4. Mortgage loans are classified as overdue when an instalment payment is overdue for more than 3 months and remains unpaid at the last day of the reporting month. The delinquency ratio is the weighted average of the ratio of the total amount of overdue loans over the total outstanding mortgage loans.

5. Co-financing schemes refer to those schemes which involve the provision of top-up loans by the property developer (or other co-financiers) in addition to the mortgage loans granted by banks. Only the portion of loans granted by banks are reported in the survey.

6. Average loan-to-value ratio, average contractual life and owner-occupied properties are all weighted average figures, which are weighted by the amount of new loans approved during month by individual banks.

Last revision date: 1 August 2011
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