Residential mortgage loans in negative equity September quarter 2008

Press Releases

21 Nov 2008

Residential mortgage loans in negative equity September quarter 2008

The Hong Kong Monetary Authority announced today the results of its latest survey on residential mortgage loans (RMLs) in negative equity1.

The estimated number of RMLs in negative equity increased to 2,568 cases2 at end-September 2008 from 936 cases in the previous quarter. This compares with a peak of about 106,000 cases at end-June 2003. The increase was primarily a result of declining property prices. The aggregate value of RMLs in negative equity rose to HK$6.0 billion at end-September 2008 from HK$1.7 billion at end-June 2008.

The unsecured portion of these loans rose to HK$0.4 billion. The loan-to-value ratio of the RMLs in negative equity fell to 107% from 112% at end-June 2008. The three-month delinquency ratio3 of the RMLs in negative equity fell to 0.08% from 0.61% at end-June 2008.

Annex

For further enquiries, please contact:
Thomas Chan, Communications Chief, at 2878 1480 or
Hing-fung Wong, Manager (Communications), at 2878 1802

Hong Kong Monetary Authority
21 November 2008

 

1 The mortgage portfolio of the surveyed authorized institutions represents about 98% of the industry total. The survey results have been extrapolated to approximate the position of the banking sector as a whole.

2 The figures derived from the survey relate only to RMLs provided by authorized institutions on the basis of first mortgages and which the reporting institution knows to be in negative equity (i.e. the outstanding loan amount with the reporting institution exceeds the current market value of the mortgaged property). Not included in these figures are some RMLs associated with co-financing schemes which would be in negative equity if the second mortgages were taken into account. The extent to which such RMLs are in negative equity is not known because authorized institutions do not maintain records on the outstanding balances of the second mortgages.

3 RMLs in negative equity delinquent for more than three months as a percentage of total RMLs in negative equity.

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Last revision date : 21 November 2008