Residential Mortgage Survey Results for October 2003

Press Releases

28 Nov 2003

Residential Mortgage Survey Results for October 2003

New mortgage lending increased in October following the strong growth in new approvals in September, according to the HKMA's monthly survey of residential mortgage lending.

New loans drawn down during the month rose sharply by 45% to HK$8.5 billion. Reflecting the pick-up in property market activity, new approvals in October increased further by 39.7% to HK$10.5 billion, the highest level since June 2002, with new approvals for primary and secondary market transactions growing strongly by 53.1% and 34.5% respectively. New applications for mortgages continued to increase, by 17.0%.

The proportion of new approvals priced at more than 2% below the best lending rate increased to 94.2% from 92.9% in September, and the proportion at more than 2.5% below the best lending rate increased further to 62.1%.

The outstanding amount of mortgage loans increased by 0.1% to HK$521.2 billion.

The declining trend of the mortgage delinquency ratio continued, with the ratio dropping further to 0.99% from 1.05% in September. Although the rescheduled loan ratio edged up to 0.56%, the combined ratio improved to 1.55% from 1.60% in September.

"Reflecting the improving domestic economic conditions, the asset quality of banks' mortgage portfolio has continued to improve, with the mortgage delinquency ratio falling to less than 1%, the lowest level since February 1999," said Mr William Ryback, Deputy Chief Executive of the HKMA. "New lending is likely to continue with the amount of undrawn loan commitments still in the pipeline."

New loans drawn down for purchasing properties in Mainland China shrank to HK$167 million. The amount of outstanding loans at end of the month remained unchanged at 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
28 November 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 : 28 November 2003