After declining for five consecutive months, new mortgage lending increased in December, according to the HKMA's monthly survey of residential mortgage lending.
The amount of gross new loans made in December increased by 36.1% to $10.5 billion from $7.7 billion in November (compared with the 5.0% decline in November). The average size of new loans increased to $1.45 million in December from $1.34 million in November.
New loans approved during the month increased by 10.4% to $14.4 billion ($13.1 billion in November). Refinancing loans continued to grow and accounted for 51.1% of new loans approved (50.6% in November). Loans approved during the month but not yet drawn increased by 1.2% from $10.7 billion in November to $10.8 billion in December.
The average loan-to-value ratio of new loans approved increased slightly to 57.6% (57.0% in November) and the average contractual life decreased to 194 months (199 months in November). Of these loans, 99.4% were related to owner-occupied properties.
On the pricing front, 85.3% of the new loans were granted at the best lending rate (91.6% in November). Loans granted at below the best lending rate for the whole term of the mortgage amounted to 10.5% of the new loans approved (compared with 2.4% in November).
The amount of outstanding mortgage loans increased by 0.21% in December, compared with a 0.12% decline in November. The annualised rate of growth of outstanding loans in the three months to December was flat compared with the decline of 0.7% in the three months to November. The average change over the last twelve months fell to 4.0% from 5.0% in November.
The loan delinquency ratio (measured by the ratio of mortgage loans overdue for more than 3 months to total outstanding mortgage loans) declined to 1.13% as at December 1999 (compared with 1.17% in November).
"Competition for mortgage business continues to intensify, as shown by the further rise in the ratio of refinancing loans and the increased proportion of new loans at margins below the best lending rate," said Mr. David Carse, Deputy Chief Executive of the HKMA. "However, the asset quality of the mortgage portfolio continues to hold up well, as shown by the renewed downturn in the delinquency ratio."
Gross loans for the purchase of properties in Mainland China increased from $112 million in November to $163 million in December. The amount of outstanding loans decreased by 0.3% to $6.49 billion.
Hong Kong Monetary Authority
27 January 2000
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.
