New mortgage lending in February decreased, according to the HKMA's monthly survey of residential mortgage lending.
Gross new loans made in February decreased to HK$7.9 billion, reflecting the slowdown in mortgage activity during the festive month of February. The average size of new loans reduced further to HK$1.28 million from HK$1.30 million in January.
In line with the decline in loan applications, new loans approved during February decreased to HK$8.2 billion. While the proportion of new approvals for transactions in the primary market and refinancing loans reduced to 43.6% and 16.8% of total new loans approved respectively, those in respect of the secondary market increased to 39.6%. Loans approved during February but not yet drawn decreased to HK$5.4 billion.
The average loan-to-value ratio of new loans approved remained unchanged at 66.2%. The average contractual life shortened by 2 months to 225 months. 99.2% of loans were related to owner-occupied properties.
On the pricing front, the proportion of new loans approved with pricing at more than 2% below the best lending rate remained more or less unchanged at 87.4%. However, the proportion of new loans priced at more than 2.5% below the best lending rate increased to 12.4% from 6.3% in January.
The amount of outstanding mortgage loans increased by 0.1% following a 0.6% increase in January.
The loan delinquency ratio (measured by the ratio of mortgage loans overdue for more than 3 months to total outstanding mortgage loans) decreased further to 1.20% from 1.22% at the end of January while the rescheduled loan ratio (measured by the ratio of rescheduled mortgage loans to total outstanding mortgage loans) increased to 0.34% from 0.30%.
"The paucity of lending opportunities appears to have fuelled competition for new loans, as reflected by the rise in proportion of loans granted at more than 2.5% below the best lending rate," said Mr David Carse, Deputy Chief Executive of the HKMA. "Banks should be mindful of the need to ensure that they earn a return adequate to cover their risk."
Gross loans made for the purchase of properties in Mainland China decreased to HK$73 million from HK$215 million in January. The amount of outstanding loans decreased by HK$177 million to HK$6.0 billion in February.
Hong Kong Monetary Authority
27 March 2002
Annex
Residential Mortgage Survey
Notes to Annex
- The Residential Mortgage Survey is a continuous monthly survey covering 29 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.
- Rescheduled loan ratio is measured by a ratio of total amount of rescheduled 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.
