The Hong Kong Monetary Authority announced today (Monday) the results of its latest survey on residential mortgage loans (RMLs) in negative equity1.
The number of RMLs in negative equity was little changed at about 8,800 cases2 with an aggregate value of HK$15 billion in the three months to end-September 2006, after having fallen in the June quarter. Compared with the peak of about 106,000 cases at end-June 2003, the number has fallen by 92%.
The estimated unsecured portion of these loans was barely changed at HK$2 billion. Correspondingly, the loan-to-value ratio of the negative equity RMLs remained unchanged at 113%. The three-month delinquency ratio3 of the negative equity RMLs rose to 1.21% from 1.13% at end-June 2006.
For further enquiries, please contact:
Sara Yip, Manager (Press), at 2878 8246 or
Hing-fung Wong, Officer (Press), at 2878 1802
1The 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.
2The 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.
Hong Kong Monetary Authority
6 November 2006