The Hong Kong Monetary Authority (HKMA) conducted a survey on repossessed properties in July 2000. The primary objective of the survey was to facilitate its prudential supervision by gathering information on the quantity of repossessed properties, including both residential and non-residential properties, held by authorised institutions (AIs) at 30 June and the practices adopted by AIs in relation to the repossession and disposal of these properties. A follow-up survey was conducted in September 2000. This was a limited survey of selected AIs accounting for around 70% of the total number of repossessed properties held by the banking sector at 30 June.
In general, the surveys indicate that sales of repossessed properties accounted for a relatively small proportion of total sale transactions and that AIs were able to accelerate disposal of repossessed properties in the third quarter of this year. Some of the main detailed findings are summarised below:
Survey at 30 June 2000
- 157 AIs in the banking sector held a total of 3,307 repossessed properties* valued at HK$13 billion and were in the process of repossessing 2,539 properties valued at HK$6 billion.
- Of the properties already repossessed, 2,245 were residential properties and 1,062 were non-residential properties.
- During the 18-month period from January 1999 to June 2000, a total of 5,025 repossessed properties were disposed of successfully. The residential properties sold by AIs during this period accounted for about 3% of the total sales transactions in the residential property market during the same period, suggesting that the impact of such properties on the residential property market was limited.
- Most of the AIs reported that their strategy was to sell repossessed properties only at an acceptable price level (i.e. they would not be prepared to sell at forced-sale values). This indicates that AIs generally adopt a prudent approach towards the disposal of repossessed properties.
Survey at 25 September 2000
- Based on the sample of AIs (which was smaller than the full June survey), the situation of repossessed properties improved in the third quarter as a result of increased sales of repossessed properties, with the monthly average disposal rate almost tripling that recorded in the 18-month period mentioned above.
- The number of repossessed properties held by the sample of AIs dropped by 13% (or 17% by value) compared with the position at 30 June. The number of properties pending repossession also declined by 15%, indicating that the condition of some problem loans might have improved.
- The AIs included in this survey generally expected the number of repossessed properties at year-end to remain around the same level as that recorded as at 25 September.
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Caitlin Wong, Manager (Press), at 2878 1687
Hong Kong Monetary Authority
28 November 2000
Annex
