The Hong Kong Monetary Authority announced today the results of its latest survey on residential mortgage loans (RMLs) in negative equity1.
The number of RMLs in negative equity increased by some 1,900 cases to about 11,000 cases2 with an aggregate value of HK$19 billion in the three months to the end of December 2005. The estimated unsecured portion of these loans was little changed at HK$2 billion. Despite the rises in two straight quarters, the number of RMLs in negative equity has fallen by about 90% compared with the peak of about 106,000 cases at the end of June 2003.
Owing to the inclusion of loans marginally in negative equity, the loan-to-value ratio of the negative equity RMLs edged down to 113% from 114% at the end of September 2005. The three-month delinquency ratio3 of the negative equity RMLs fell to 0.89% from 0.96% at the end of September 2005, reflecting the continued improvement in the loan quality of the negative equity RMLs.
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Hing-Fung Wong, Resource Co-ordinator, at 2878 1802
Hong Kong Monetary Authority
6 February 2006
Annex (PDF file, 10KB)
1 The mortgage portfolio of the surveyed authorized institutions represents about 98% of the industry total. The survey results have been extrapolated to approximate the position of the banking sector as a whole.
2 The figures derived from the survey relate only to RMLs provided by authorized institutions on the basis of first mortgages and which the reporting institution knows to be in negative equity (i.e. the outstanding loan amount with the reporting institution exceeds the current market value of the mortgaged property). Not included in these figures are some RMLs associated with co-financing schemes which would be in negative equity if taking into account the second mortgage. The extent to which such RMLs are in negative equity is not known because authorized institutions do not maintain records on the outstanding balances of the second mortgages.