New mortgage lending fell in February, according to the HKMA's monthly survey of residential mortgage lending.
The amount of gross new loans made in February fell by 5.2% to $10.0 billion compared with the flat growth in January. The average size of new loans increased to $1.45 million in February from $1.41 million in January.
New loans approved during the month decreased by 21.5% to $10.3 billion from $13.1 billion in January. Refinancing loans fell in absolute terms for the second consecutive month, and accounted for 46.5% of new loans approved (52.6% in January). Loans approved during the month but not yet drawn decreased by 24.8% to $7.6 billion in February from $10.1 billion in January.
The average loan-to-value ratio of new loans approved stayed unchanged at 57.0% in February. The average contractual life increased to 195 months from 187 months. Of these loans, 97.1% were related to owner-occupied properties.
On the pricing front, 65.5% of the new loans were granted at the best lending rate, down from 75.3% in January. Loans granted at below the best lending rate for the whole term of the mortgage rose to 29.5% of the new loans approved, up from 20.4% in January.
The amount of outstanding mortgage loans remained flat in February. The annualised rate of growth of outstanding loans was 0.7% in the three months to February, up from 0.4% in January. The average change over the last twelve months fell to 3.2% from 3.6% 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 slightly to 1.17% in February from 1.16% in January.
"Despite the fall in the ratio of refinancing loans, competition for new mortgage business remains intense and margins are continuing to be squeezed." said Mr David Carse, Deputy Chief Executive of the HKMA.
Gross loans made for the purchase of properties in Mainland China decreased to $15 million in February from $167 million in January. The amount of outstanding loans decreased by $160 million to $6.33 billion.
Hong Kong Monetary Authority
29 March 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 "
