New mortgage lending increased slightly in June, according to the HKMA's monthly survey of residential mortgage lending.
The amount of gross new loans made in June increased by 2.4% to $14.1 billion from $13.8 billion in May (compared with the 50.4% rise in May). The average size of new loans increased to $1.58 million in June from $1.53 million in May.
New loans approved during the month increased by 1.5% to $15.6 billion ($15.4 billion in May). Loans approved during the month but not yet drawn also rose by 4.5% from $11.2 billion in May to $11.7 billion in June.
The average loan-to-value ratio of new loans approved was 57.35% (57.03% in May) and the average contractual life was 201 months (204 months in May). 99.7% of these loans were related to owner-occupied properties.
Reflecting the slower pace of growth in new mortgage lending, the amount of outstanding mortgage loans increased by 0.8% in June, compared with 1.14% growth in May. The annualised rate of growth of outstanding loans in the three months to June increased to 10.1% from 8.9% in May. The average change over the last twelve months remained at 8.2%, which was the same as in the preceding month.
For the first time since the HKMA started collecting the relevant statistics in June 1998, the loan delinquency ratio (measured by the ratio of mortgage loans overdue for more than 3 months to total outstanding mortgage loans) in June 1999 declined to 1.14% from 1.16% in May.
There was little change in pricing trends in June. 87.2% of the new loans approved were granted at the best lending rate (compared with 86.6% in May).
"The decline in the loan delinquency ratio of mortgage loans is encouraging," said Mr. David Carse, Deputy Chief Executive of the HKMA. "However, a longer run of figures will be required to determine whether this is the start of a prolonged downward trend."
Gross loans for the purchase of properties in Mainland China increased from $25 million in May to $62 million in June. The amount of outstanding loans decreased by 1.54% to $6.99 billion.
Hong Kong Monetary Authority
28 July 1999
Annex
Notes to Annex
- 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.
- Gross new loans made refer to mortgage loans which are actually drawn down during the month.
- 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.
- 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.
- 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.
- 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.
