New mortgage lending revived moderately in February, according to the HKMA's monthly survey of residential mortgage lending.
New loans approved during the month increased by 10.1% to HK$7.3 billion, driven largely by growth in approvals for transactions in the primary market, which accounted for 32.1% of approvals. Loans approved during the month but not yet drawn increased by 11.8% to HK$5.5 billion.
Reflecting the increase in loan approvals in January, the amount of gross new loans actually advanced in February rose by 13.6% to HK$5.7 billion. The average size of new loans increased to HK$1.37 million from HK$1.31 million in January.
The average loan-to-value ratio of new loans approved dropped slightly to 60.3% from 60.9% in January. The average contractual life shortened to 201 months from 204 months. 99.2% of loans were related to owner-occupied properties.
On the pricing front, 70.8% of new loans approved were priced at more than 2% below the best lending rate, up from 66.6% in January. 34.9% were priced at more than 2.25% below the best lending rate, a significant increase on the 19.0% in January.
The amount of outstanding mortgage loans fell by another 0.3% in February. The 12-month growth rate further decreased to 0.2% from 0.4% in January.
The loan delinquency ratio (measured by the ratio of mortgage loans overdue for more than 3 months to total outstanding mortgage loans) increased to 1.34% from 1.30% in January.
"Competition for mortgage business intensified further in February, as shown by the significant increase in loans advanced at more than 2.25% below the best lending rate," said Mr. David Carse, Deputy Chief Executive of the HKMA. "Banks should assess carefully the impact on their profitability if funding costs rise. The increase in the delinquency ratio also needs to be kept in view."
Gross loans made for the purchase of properties in Mainland China decreased to HK$11 million from HK$43 million in January. The amount of outstanding loans decreased further by HK$122 million to HK$5.7 billion in February.
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Caitlin Wong, Manager (Press), at 2878 1687
Hong Kong Monetary Authority
27 March 2001
Annex
Notes to Annex
- The Residential Mortgage Survey is a continuous monthly survey that covered 32 authorized institutions in the banking industry.
- Residential mortgage loans in this survey are loans (include refinancing loans) to private individuals for purchase of residential properties, including uncompleted units, but other than those properties under the Home Ownership Scheme, Private Sector Participation Scheme and Tenants Purchase Scheme.
- Gross new loans made are new mortgage loans drawn down during the surveyed month.
- New loans approved are mortgage loans approved during the surveyed month. The loans can either be drawn down in the same month or in the following months. Loans that are approved but not yet drawn, which have implications for the amount of gross new loans made in the following months, are shown under the item "New loans approved during month but not yet drawn".
- Delinquency ratio is measured by a ratio of total amount of overdue loans to total outstanding loans.
- Co-financing schemes refer to those schemes that involve provision of top-up finance by property developer(s) or other co-financier(s) in addition to mortgage loans advanced by authorized institutions. For loans associated with co-financing schemes, only the portion of loans advanced by authorized institutions are included in this survey.
- Average loan-to-value ratio and average contractual life are average figures weighted by the amount of new loans approved during the surveyed month by individual authorized institutions.
