Residential Mortgage Survey Results for May 1997

Substantial amounts of new finance continued to be channeled into the residential mortgage market in May according to the results of the latest survey conducted by the Hong Kong Monetary Authority (HKMA).

Gross new loans increased during the month by 14.7% to $26.0 billion. The average size of new loans increased to $1.91 million compared with $1.77 million in April. New loans approved during the month rose by 4.6% to $30.1 billion.

Repayment of loans during May rose at a slower pace than new loans. The amount of outstanding loans thus increased by 2.7% to $371.8 billion in May, compared with a 2.4% increase in April.

The annualized rate of growth of outstanding loans in the three months to May increased to 30.0% from 29.4% in the three months to April. The average change over the last twelve months increased to 24.9% in May from 23.1% in April.

"The rapid growth in residential mortgage lending in May gives some cause for concern," said Mr David Carse, Deputy Chief Executive of the HKMA. "However, the property market has recently been more subdued. The HKMA is therefore continuing to evaluate the situation."

The trend of price cutting continued in May. Of new loans approved during May, 56.7% were priced at 0.25% above best lending rate, compared with 55.4% in April. Loans granted at best lending rate increased to 18.0% from 14.4%.

Gross loans for the purchase of properties in China decreased to $228 million in May from $238 million in April. The amount of outstanding loans increased by 1.08% to $6.67 billion.

RESIDENTIAL MORTGAGE LOANS IN HONG KONG
(33 institutions)

GROSS NEW LOANS MADE DURING THE MONTH

NEW LOANS APPROVED DURING MONTH



NEW LOANS APPROVED BUT NOT YET DRAWN

Remarks: The significant fall of outstanding balance in December 1994 was due to the effect of reclassification, securitization and sale of loans by some institutions.






Hong Kong Monetary Authority
26 June1997