Home loan approvals fall 6.4pc
Property agent Centaline sees rebound after June mortgages slip to $12.9 billion as sales in secondary market decline
New home loan approvals fell 6.4 per cent month on month last month to $12.9 billion, mainly because sales dropped in the secondary market, according to the Hong Kong Monetary Authority.
Last month's decline reversed a 19.7 per cent gain in May, but market watchers expected new approvals to rise slightly this month on improved market sentiment.
Shih Wing-ching, chairman of property agency Centaline (Holdings), said the end of the World Cup football tournament and the schools examination season would also help potential buyers return to the market.
'Some people may be interested in buying properties again as we have seen some developers cut selling prices [recently],' Mr Shih said. 'I think new loan approvals will improve slightly this month but may improve more significantly next month.'
New mortgage approvals for secondary market deals fell 11.4 per cent to $907 million last month, while approvals for the primary market fell 0.6 per cent to $21 million despite a 2.1 per cent increase in refinancing approvals, HKMA's latest data showed.
New mortgages drawn down last month jumped 24.5 per cent to $12.5 billion after rising 12.9 per cent in May, according to the data.
Mortgage borrowers usually trigger the loans they have secured from banks only when payments begin upon completion of the flats.
Peggy Tam Lai-king, the head of secured lending at Hang Seng Bank, said she expected new loans drawn down this month would continue to rise because of some large property projects that were scheduled for completion. 'However, new loan approvals this month may continue to decline as many developers are only selling the remaining units of their projects and that activities in the secondary market remain slow,' she said.
Meanwhile, the ratio of discounted mortgages - offered at more than 2.5 percentage points below the prime rate - rose to 70.4 per cent of the 7,387 loans approved last month, from 65.3 per cent in May.
'I think the proportion [of discounted mortgages] will be bigger this month as many banks offer promotional packages to entice customers,' Ms Tam said.
'But I think there's not much room for banks to cut their prices further.'
The HKMA figures also showed that total loans drawn down for purchasing properties in the mainland jumped 63.8 per cent to $639 million last month.
Market watchers said the increase reflected strong demand in March and April in the mainland market amid expectation of yuan appreciation.
'I think the drawdowns will decline especially after recent austerity measures introduced by the mainland government,' a property agent said.
