Hong Kong Monetary Authority - Residential Mortgage Survey Results for December 1997

Press Releases

26 Jan 1998

Residential Mortgage Survey Results for December 1997

New mortgage activity continued to slow in December 1997 according to the results of the latest monthly survey conducted by the Hong Kong Monetary Authority ("HKMA").

Gross new loans made during the month fell significantly both in number and in amount. The number of new loans made dropped by 37% from 8,343 to 5,253 whereas the amount of new loans made dropped by 36% from $15.3 billion to $9.8 billion. The average size of new loans increased slightly to $1.86 million in December compared to $1.83 million in November. The amount of outstanding mortgage loans increased by 0.44%, compared with 1.2% growth in November 1997.

New loans approved during the month decreased further by 29.8% to $8.4 billion, reflecting the continued sluggish market in December. Loans approved during the month but not yet drawn also fell significantly by 38% from $8.6 billion in November to $5.3 billion in December.

The annualised rate of growth of outstanding loans in the three months to December decreased to 9.9% from 20.6% in November. The average change over the last twelve months also decreased to 28.3% from 31% in November.

On the pricing front, mortgage rates continued to harden in December. More than 50% of new loans were priced at 1% or more above best lending rate.

"Given the continued decrease in undrawn lending commitments and the current market conditions, the outlook is for lending activity to remain subdued," said Mr. David Carse, Deputy Chief Executive of the HKMA.

Gross loans for the purchase of properties in Mainland China increased to $282 million in December from $271 million in November. The amount of outstanding loans increased by 1.65% to $7.9 billion.

Hong Kong Monetary Authority

26 January 1998

**Residential Mortgage Survey Results for December 1997**
33 Authorised Institutions	Dec-97 HK$m	Nov-97 HK$m
1. Gross new loans made during month Amount of new loans Monthly change in amount Number of new loans Average size of new loans	9,767 -36.2% 5,253 1.86	15,299 -14.4% 8,343 1.83
2. New loans approved during month Amount of approvals Monthly change in approvals Number of approvals Average size of approvals By Property age Property age - 15 years or below - amount - number Property age - above 15 years - amount - number Associated with co-financing schemes - amount - number	8,394 -29.8% 4,307 1.95 6,726 3,220 1,667 1,087 673 264	11,956 -45.6% 6,311 1.89 9,261 4,561 2,696 1,750 210 63
3. New loans approved during month but not yet drawn Amount of approvals Number of approvals	5,320 2,464	8,606 4,326
4. Amount of outstanding loans Amount of loans Monthly change in loans Twelve-month change in loans Average monthly changes over last three months (annualized) last twelve months (annualized) Associated with co-financing schemes - amount - number	425,469 0.44%* 28.9%* 9.9%* 28.3%* 14,653 7,126	425,784 1.2% 31.3% 20.6% 31.0% 14,746 7,182
5. Interest margin on new loans approved during month At BLR More than 0% and up to 0.25% above BLR More than 0.25% and up to 0.5% above BLR More than 0.5% and up to 0.75% above BLR More than 0.75% and up to 1% above BLR More than 1% above BLR Others	1.4% 9.9% 8.8% 14.9% 37.5% 17.9% 9.6%	3.6% 12.4% 14.5% 16.4% 31.6% 14.4% 7.1%
* Figures have been adjusted for the effect of sale of mortgage loans to the HKMC and securitisation amounting to HK$ 2,200 million.

RESIDENTIAL MORTGAGE LOANS IN HONG KONG
(33 institutions)

GROSS NEW LOANS MADE DURING THE MONTH

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NEW LOANS APPROVED DURING MONTH

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NEW LOANS APPROVED BUT NOT YET DRAWN

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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.

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