New mortgage lending continued to decline in August, according to the HKMA's monthly survey of residential mortgage lending.
New loans drawn down during the month decreased by 15.8% to HK$6.1 billion. New loans approved, however, increased slightly by 1.6% to HK$7.5 billion, driven by a 56.5% increase in primary market transactions. New approvals for refinancing loans (including those in respect of loans in negative equity) decreased by 25.7%, and for secondary market transactions, by 14.6%. The average loan-to-value ratio decreased to 67.0%.
86.0% of new loans approved were priced at more than 2% below the best lending rate, up from 78.8% in July.
The amount of outstanding mortgage loans decreased by 0.3% to HK$535.4 billion.
The mortgage delinquency ratio rose for the first time in 15 months to 1.09% from 1.07%. The rescheduled loan ratio also increased from 0.45% to 0.47%. The combined ratio thus rose from 1.52% in July to 1.56%.
"Given the state of the economy and the position on bankruptcies, it is perhaps not surprising that the mortgage delinquency ratio has risen a little," said Mr David Carse, Deputy Chief Executive of the HKMA. "This highlights the need for banks to remain alert to any signs of possible deterioration in the asset quality of their mortgage portfolios," he added.
Gross loans for the purchase of properties in Mainland China decreased to HK$120 million, and the amount of outstanding loans was HK$6.1 billion.
For further enquiries, please contact:
Sylvia Yip, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480
Hong Kong Monetary Authority
30 September 2002
Annex
Residential Mortgage Survey
Notes to Annex
- The Residential Mortgage Survey is a continuous monthly survey covering 28 authorized institutions in the banking industry.
- Residential mortgage loans (RMLs) 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, the Private Sector Participation Scheme and the 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 reporting institutions is included in this survey.
- Average loan-to-value ratio and average contractual life for new loans approved during the surveyed month are average figures weighted by the amount of new loans approved during the surveyed month by individual reporting institutions.
