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Kenneth Ko

Home mortgage lending fell sharply last month as the property market remained subdued, according to the Hong Kong Monetary Authority.

The authority's monthly survey found gross new loans made last month slumped 38.1 per cent to HK$5.9 billion, compared with a 7.2 per cent month-on-month increase in November.

New loans approved last month continued their fall, by 26.4 per cent to HK$5.8 billion, after a decline of 28 per cent in November.

Refinancing activity remained a core component, accounting for 35.4 per cent of new loans approved.

This compared with a 39.3 per cent share in the preceding month.

Loans approved last month but not yet drawn decreased by 14.4 per cent to HK$3.9 billion from HK$4.6 billion in November.

Estate agents said home buyers continued to adopt a cautious approach and hence residential transactions were sluggish in both primary and secondary markets.

Developers had to offer additional sweeteners, including mortgage subsidies and cash rebates, to lure buyers.

The loan delinquency ratio - measured by the ratio of mortgage loans overdue for more than three months to total outstanding mortgage loans - fell to 1.26 per cent from 1.31 per cent.

'While the fall in the delinquency ratio was largely due to write-offs made by some banks before the year-end, there also appeared to be a slowdown in the increase of overdue loans,' said HKMA deputy chief executive David Carse.

'However, whether this improvement will be maintained in the coming months remains to be seen.'

Competition among banks for a bigger slice of the home-mortgage market continued to be intense, especially when property transactions dwindled.

Loans granted at more than 2 per cent below the best lending rate represented 62.8 per cent of new loans approved, up from 60.6 per cent in November.

Loans granted at below the best lending rate for the whole mortgage term accounted for 87.1 per cent of new loans approved, compared with 90.5 per cent in November.

The amount of outstanding mortgage loans fell by 0.4 per cent last month.

The 12-month growth rate fell to 0.8 per cent from 1.3 per cent in November.

Gross loans made for the purchase of properties in China increased to HK$51 million from HK$45 million in November.

The amount of outstanding loans fell further by HK$110 million to HK$6 billion.



Number of new home loans slumps