New mortgage lending continued to decline in February, according
to the HKMA's monthly survey of residential mortgage lending. This
partly reflected seasonal factors associated with the Lunar New
Year holiday.
The amount of gross new loans made in February decreased by
16.1% to $7.2 billion from $8.6 billion in January (compared with
the 35.3% decrease in January). The average size of new loans
increased to $1.46 million in February from $1.42 million in
January.
New loans approved during the month fell by 15.6% to $8.0
billion ($9.4 billion in January). Loans approved during the month
but not yet drawn also decreased by 13.4% from $7.1 billion in
January to $6.2 billion in February.
The average loan-to-valuation ratio of new loans approved was
57% (56.3% in January) and the average contractual life was 212
months (213 months in January). 99.4% of these loans were related
to owner-occupied properties.
Reflecting the subdued market conditions in February, the amount
of outstanding mortgage loans increased at a slower rate of 0.35%
in February, compared with 0.37% growth in January. The annualised
rate of growth of outstanding loans in the three months to February
decreased to 7.9% from 11.0% in January. The average change over
the last twelve months decreased to 8.8% from 9.2% in January.
The loan delinquency ratio (measured by the ratio of mortgage
loans overdue for more than 3 months to total outstanding mortgage
loans) rose to 1.07% as at February 1999 (compared with 0.96% in
January).
On the pricing front, mortgage rates eased further with 70.3% of
the new loans granted at the best lending rate plus 0.25% or below
(compared with 50.9% in January). In particular, the portion of new
loans granted at the best lending rate rose to 33.7% in February
from 20.9% in January.
"The continuing decline in margins in February reflects active
competition not only in the primary market but also in the
secondary market. It is important in these circumstances that banks
do not relax their prudent lending criteria," said Mr. David Carse,
Deputy Chief Executive of the HKMA.
Gross loans for the purchase of properties in Mainland China
decreased from $62 million in January to $18 million in February.
The amount of outstanding loans decreased slightly by 1.55% to
$7.44 billion.
* * More Informations about Residential Mortgage Survey Results
Hong Kong Monetary Authority
23 March 1999
Notes to Annex
1. Residential mortgage loans in the survey refer to loans
(which include refinancing loans) to private individuals for the
purchase of residential properties, including uncompleted flats,
but excluding flats in the Home Ownership Scheme, Private Sector
Participation Scheme and Tenants Purchase Scheme. Mortgage loans to
corporate clients are excluded from the survey.
2. Gross new loans made refer to mortgage loans which are
actually drawn down during the month.
3. New loans approved refer to mortgage loans which are approved
during the month. The loans can either be drawn down in the same
month or in the following months. The loans which are approved but
not yet drawn down are shown under the item "New loans approved
during month but not yet drawn". This figure will have implications
for the amount of gross new loans made in the following months.
4. Mortgage loans are classified as overdue when an instalment
payment is overdue for more than 3 months and remains unpaid at the
last day of the reporting month. The delinquency ratio is the
weighted average of the ratio of the total amount of overdue loans
over the total outstanding mortgage loans.
5. Co-financing schemes refer to those schemes which involve the
provision of top-up loans by the property developer (or other
co-financiers) in addition to the mortgage loans granted by banks.
Only the portion of loans granted by banks are reported in the
survey.
6. Average loan-to-value ratio, average contractual life and
owner-occupied properties are all weighted average figures, which
are weighted by the amount of new loans approved during month by
individual banks.
