Residential Mortgage Survey Results for December 2002

New mortgage lending remained subdued in December, according to the HKMA's monthly survey of residential mortgage lending.

New loans drawn down during the month decreased further by 16.9% to HK$5.6 billion. New loans approved, however, increased by 21.4% to HK$7.3 billion driven by primary market transactions.

The proportion of new approvals that were priced at more than 2% below the best lending rate increased to 90.9%.

The amount of outstanding mortgage loans declined by 0.3% to HK$533.7 billion.

The mortgage delinquency ratio and the rescheduled loan ratio dropped to 1.06% and 0.46% from 1.11% and 0.47% respectively. The combined ratio thus decreased to 1.52% from 1.58%.

"The improvement in the combined ratio of delinquent and rescheduled loans is encouraging, although the operating environment remains difficult," said Mr David Carse, Deputy Chief Executive of the HKMA. "It is to be hoped that banks will continue to be sympathetic to borrowers in financial difficulties given the continuing weak economic condition and high unemployment numbers."

While gross loans for the purchase of properties in Mainland China was HK$287 million, the amount of outstanding loans was HK$6.3 billion.

For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
28 January 2003

Annex

Notes to Annex

1. The Residential Mortgage Survey is a continuous monthly survey covering 27 authorized institutions in the banking industry. With effect from the position of December 2002, the number of authorized institutions participating in this survey is reduced to 27 from 28 due to consolidation 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.