A MASSIVE 47 per cent leap in the volume of new home loans taken out in June must mean that the dreaded speculators have returned. That in turn means the Government is likely to be even more reluctant to phase out its controversial 70 per cent mortgage limit guideline to banks. The value of new home loans jumped from $7.66 billion in May to $11.2 billion in June, according to statistics released yesterday by the Monetary Authority. To put this down to a surge of buying by end-users would be wrong. Banks publicly say they are doing their utmost to prevent mortgage lending to out-and-out speculators. But some must be. The Monetary Authority said the number of home deals climbed from 6,500 in May to 9,600 in June. Yet few people in Hongkong can afford the hefty 30 to 40 per cent down-payments demanded under the 70 per cent mortgage limit. The exceptionally high level of activity in June can partly be put down to a return of mainland investors to luxury home buying. This is said to have prompted fresh interest from local speculators. Mortgage lending limits may have proved effective at preventing many Hongkong residents from owning homes, but has had mixed success at cooling activity and runaway price rises. Prices of top-notch homes have leapt 17 per cent during the past three months, according to the latest Jones Lang Wootton Property Index. Meanwhile, mass market prices, which dipped five to 12 per cent in the latter part of last year - nine months after the Government-backed mortgage restrictions were introduced - are now returning to the levels seen early last summer at the height of the speculation. Banks could drop their mortgage lending ratios further, but that would not help home-buyers. A rise in interest rates would probably prove far more effective at quelling activity, but this is not an alternative because of the currency peg to the US dollar.