Residential mortgage lending fell sharply last month due to seasonal factors and a decrease in new property sales. The Hong Kong Monetary Authority (HKMA) said new loans approved dropped 23 per cent to $18 billion. 'The slower pace of new mortgage lending in February coincided with the Lunar New Year and a sharp fall in the amount of new properties released to the market,' HKMA deputy chief executive David Carse said. Loans approved but not yet drawn were down 27.3 per cent to $10.9 billion in February. Gross new loans made in February fell 8.9 per cent to $18.8 billion. But Mr Carse said: 'The pace of lending seems likely to pick up again in March in line with the revival of primary market activity.' The amount of outstanding loans continued to rise rapidly in February, by 2.7 per cent to $347.9 billion. This reflected a sharp fall in the amount of repayments made last month. Some analysts cautioned that mortgage lending might slow as the interest rate increase could dampen property activity. Mr Carse stressed that banks should maintain prudent lending criteria, adding it had recently advised them to resist suggestions of reducing or waiving charges for early repayment of mortgage loans since that could encourage speculation. Gross new loans for the purchase of properties in China fell to $93 million in February, from $132 million in January.