New mortgage lending increased further in July, according to the HKMA's monthly survey of residential mortgage lending.
The amount of gross new loans made in July increased by 10.1% to HK$11.1 billion. The average size of new loans increased notably to HK$1.48 million from HK$1.26 million in June.
After increasing in June, new loans approved during July reduced slightly by 0.6% to HK$11.6 billion. New approvals for transactions in the primary market grew further by 19.2% to account for 42.9% of the total new loans approved. New approvals for transactions in the secondary market and refinancing loans continued to fall, and accounted for 39.8% and 17.3% of the total new loans approved respectively, compared with 42.4% and 21.8% in June. Loans approved during July but not yet drawn decreased by 9.4% to HK$7.1 billion.
The average loan-to-value ratio of new loans approved edged up to 63.2% from 63.0% in June. The average contractual life lengthened to 219 months from 216 months. 99.4% of loans were related to owner-occupied properties.
On the pricing front, 80.4% of new loans approved were priced at more than 2% below the best lending rate, up further from 79.0% in June. New loans approved at more than 2.25% below the best lending rate also increased, to 57.4% from 52.8% in June.
After remaining flat in the previous months, the amount of outstanding mortgage loans rose by 0.4% 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 for the third consecutive month to 1.31% from 1.35% in June. This was largely attributable to a continued increase in write-offs made by some banks and repayments on loans overdue.
"While it is encouraging to see a further decline in the delinquency ratio, banks are reminded to closely monitor the asset quality of their mortgage loan portfolios as well as exercise caution in pricing their loans amid a slowing economy," said Mr David Carse, Deputy Chief Executive of the HKMA.
Gross loans made for the purchase of properties in Mainland China increased to HK$70 million from HK$22 million in June. The amount of outstanding loans decreased further by HK$75 million to HK$6.2 billion in July.
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480
Hong Kong Monetary Authority
28 August 2001
Annex
Notes to Annex
- The Residential Mortgage Survey is a continuous monthly survey covering 38 authorized institutions in the banking industry.
- Residential mortgage loans in this survey are loans (including refinancing loans) to private individuals for the 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 is 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.
