Residential Mortgage Survey Results for September 2003

Press Releases

30 Oct 2003

Residential Mortgage Survey Results for September 2003

New loans drawn down fell in September by 23.4% to HK$5.8 billion owing to a decline in new approvals in August, according to the HKMA's monthly survey of residential mortgage lending.

However, on the back of improved economic conditions and property market sentiment, property transactions increased, as reflected by the increase in new loan approvals and applications. New approvals increased by 26.3% to HK$7.5 billion, attributable to the respective increase of 37.4% and 25.8% in approvals for primary and secondary market transactions. The number of applications for mortgages also increased, by 24.2%.

While the proportion of new approvals priced at more than 2% below the best lending rate remained unchanged at 92.9%, the proportion at more than 2.5% below the best lending rate increased to a new high of 51.3%.

The outstanding amount of mortgage loans reduced by 0.3% to HK$520.7 billion.

The mortgage delinquency ratio improved for the fourth consecutive month to 1.05% from 1.09% in August. With the rescheduled loan ratio remaining unchanged at 0.55%, the combined ratio improved to 1.60%.

"Benefiting from the improving domestic economy and lower trend in unemployment rate, the asset quality of banks' mortgage portfolios improved," commented Mr William Ryback, Deputy Chief Executive of the HKMA. "With the increase in new approvals in September, new mortgage lending is expected to increase in October."

New loans drawn down for purchasing properties in Mainland China increased to HK$263 million. The amount of outstanding loans at end of the month was HK$6.4 billion.

For further enquiries, please contact:

Kevin Ip, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
30 October 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].
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Last revision date : 30 October 2003