Hong Kong's residential mortgage market grew 7.1 per cent in the three months to March compared with 6.8 per cent the previous quarter, boosted by increased speculation. Government statistics show that outstanding residential mortgages at the end of March stood at $396.3 billion, up from $370.1 billion in December. This represents a year-on-year increase of 26 per cent. Hongkong Bank economist George Leung Siu-kei said the growth was propelled by a buoyant property market over the past three months. He expected the growth to slow in the second quarter as government anti-speculation measures took effect. 'Growth should pick up again in the third quarter when end-users start to enter the market,' he said. The strong lending trend extended to the stock market, where loans to stock brokers - providing margin financing to investors - recorded 15.5 per cent growth over the previous quarter, driven by increased initial public offerings. Loans to the trade finance sector declined 0.6 per cent compared with a quarter earlier, in line with the territory's weak trade performance during the period. Mr Leung did not expect Hong Kong's trade sector to recover significantly until the second half. He said Imports to and exports from China were expected to take time to speed up. Total deposits at the end of March were $2.5 trillion, down 1.3 per cent from February.