New mortgage lending increased in June, according to the HKMA's monthly survey of residential mortgage lending.
The amount of gross new loans made in June rose by 3.8% to $10.1 billion after falling by 3.6% in May. The average size of new loans stayed at $1.43 million in June.
However, new loans approved during the month dropped by 7.1% to HK$12.4 billion compared with the rise of 2.0% in May, largely due to a drop in refinancing loans and loans to the secondary market. Refinancing loans fell in absolute terms for the first time in four months, and accounted for 50.7% of new loans approved in June (same as in May). Loans approved during the month but not yet drawn fell by 5.1% to $9.8 billion in June from $10.4 billion in May.
The average loan-to-value ratio of new loans approved remained unchanged at 57.3% in June. The average contractual life increased to 198 months from 197 months. Of these loans, 99.0% were related to owner-occupied properties.
On the pricing front, loans granted at below the best lending rate for the whole term of the mortgage accounted for 89.0% of the new loans approved, up from 82.9% in May.
The amount of outstanding mortgage loans was flat in June. The annualised rate of growth of outstanding loans was 1.3% in the three months to June, down from 1.8% in May. The average change over the last twelve months was 0.7%, compared with 1.6% in May.
The loan delinquency ratio (measured by the ratio of mortgage loans overdue for more than 3 months to total outstanding mortgage loans) increased to 1.23% in June from 1.19% in May.
"Though still maintained at a low level, the delinquency ratio has increased in the past few months, " said Mr Raymond Li, Acting Deputy Chief Executive of the HKMA. "Banks should continue to closely monitor their asset quality and to adhere strictly to prudent lending criteria."
Gross loans made for the purchase of properties in Mainland China increased by 93.2% to $206 million in June from $107 million in May. The amount of outstanding loans increased by $59 million to $6.14 billion.
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Alice Lo, Manager (Press), at 2878 1843
Hong Kong Monetary Authority
26 July 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.
