Residential Mortgage Survey Results for November 1997

Mortgage lending continued to slow in November according to the results of the latest monthly survey conducted by the Hong Kong Monetary Authority (HKMA).

Gross new loans made during the month decreased further by 14.4% to $15.3 billion, after a 29.8% drop in October. The average size of new loans also dropped to $1.83 million in November compared to $1.95 million in October. The amount of outstanding mortgage loans grew by 1.2% to $425.8 billion in November (compared with 0.7% in October) as previous loan approvals were drawn down.

New loans approved during the month dropped sharply by 45.6% to $12.0 billion, reflecting the relatively sluggish property market since the end of October. Loans approved during the month but not yet drawn also fell significantly by 41.6% from $14.7 billion in October to $8.6 billion in November.

The annualised rate of growth of outstanding loans in the three months to November decreased to 20.6% from 25.7% in October. The average change over the last twelve months also decreased to 31.0% from 32.0% in October.

On the pricing front, mortgage rates further hardened in November. Of the new loans approved during November, only 3.6% were priced at best lending rate, well below the 9.5% in October. On the other hand, loans granted at more than 0.75% above the best lending rate increased significantly from 11.2% in October to 46% in November.

"Given the significant decrease in undrawn lending commitments, the outlook is for continued subdued loan growth," said Mr. David Carse, Deputy Chief Executive of the HKMA.

Gross loans for the purchase of properties in Mainland China decreased to $271 million in November from $395 million in October. The amount of outstanding loans increased by 2.28% to $7.76 billion.

Hong Kong Monetary Authority

22 December 1997

Residential Mortgage Survey Results for November 1997

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.