New mortgage lending rose in August, according to the HKMA's monthly survey of residential mortgage lending.
The amount of gross new loans made in August increased by 13.9% to HK$11.5 billion after falling by 0.3% in July. The average size of new loans increased to HK$1.40 million in August from HK$1.35 million in July.
However, new loans approved during the month fell by 19.2% to HK$10.6 billion compared with a rise of 6.1% in July, largely driven by a decline in loan approvals in the primary market. Refinancing loans fell in absolute terms for the third consecutive month, and accounted for 29.5% of new loans approved in August, a slight decline from the ratio of 30.5% in July. Loans approved during the month but not yet drawn decreased by 29.8% to HK$7.3 billion in August from HK$10.4 billion in July.
The average loan-to-value ratio of new loans approved further rose slightly to 59.1% in August from 58.9% in July. The average contractual life shortened marginally to 205 months from 206 months in July. 99.3% of loans 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 88.4% of the new loans approved, the same as in July.
The amount of outstanding mortgage loans edged up by 0.5% in August. The 3-month moving average growth rate (annualised) of outstanding loans reversed to a rise of 1.4% from a fall of 0.5% in the 3 months to July. The 12-month moving average growth rate also increased, to 0.8% from 0.3% in July.
The loan delinquency ratio (measured by the ratio of mortgage loans overdue for more than 3 months to total outstanding mortgage loans) decreased marginally to 1.26% in August from 1.27% in July.
"The recent deterioration in the asset quality of the mortgage portfolio seems to have paused in August, as evidenced by the drop in the delinquency ratio," said Mr. David Carse, Deputy Chief Executive of the HKMA. "However, while this is encouraging, it is too early to conclude that the improvement will be maintained in the coming months."
Gross loans made for the purchase of properties in Mainland China more than doubled to HK$365 million in August from HK$167 million in July. The amount of outstanding loans increased by HK$258 million to HK$6.38 billion.
For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Caitlin Wong, Manager (Press), at 2878 1687
Hong Kong Monetary Authority
27 September 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.
