Residential Mortgage Survey Results for February 1998

The rate of decline of new mortgage lending moderated further in February 1998, while loan approvals continued to increase.

Gross new loans made during the month continued to drop in February, though at a slower rate than in January. The amount of new loans made fell by 1.5% from $8.3 billion to $8.2 billion (compared with a fall of 15.0% in January). The average size of new loans increased slightly to $1.99 million in February compared to $1.95 million in January. The amount of outstanding mortgage loans increased by 0.72% in February, compared with 0.69% growth in January.

New loans approved during the month rose by 2.7% to $9.4 billion. Loans approved during the month but not yet drawn increased by 5.1% from $6.0 billion in January to $6.3 billion in February.

The annualised rate of growth of outstanding loans in the three months to February decreased to 7.5% from 9.6% in January. The average change over the last twelve months also decreased to 23.6% from 25.9% in January.

On the pricing front, mortgage rates continued to harden in February. 72% of new loans were priced at 1% or more above best lending rate (compared with 62% in January).

"Although loan approvals rose in February, they are still running at a comparatively low level. Loan growth is therefore expected to remain moderate," said Mr. David Carse, Deputy Chief Executive of the HKMA.

Gross loans for the purchase of properties in Mainland China decreased to $113 million in February from $262 million in January. The amount of outstanding loans decreased marginally by 0.06% to $8.0 billion.

Hong Kong Monetary Authority

25 March 1998

Residential Mortgage Survey Results for February 1998

* Adjusted for the effect of sale of mortgage loans to HKMC by an institution amounting to $487 million

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.