THE two largest mortgage lending banks, Hongkong Bank and Hang Seng Bank, recorded drastic falls in new loan applications in September, following the tightening of their mortgage policies in late August.
Last month, new loan applications with Hongkong Bank plummeted 37 per cent and Hang Seng Bank 43 per cent.
Mortgage levels had skyrocketed to unprecedented levels before the introduction of the stringent rules. Last month, the amount taken up by successful applicants dropped 31 per cent for Hongkong Bank and 34 per cent for Hang Seng Bank.
''Mortgage lending volume can include those loans approved earlier, say in May or June,'' Hang Seng Bank general manager Alice Lam said.
She pointed out that another useful indicator, the number of people seeking early redemption of mortgages as they sell one home and buy another, showed the same trend.
Hang Seng Bank's early redemption volume fell 13 per cent.
''That means less transactions in flats changing hands,'' she said.