New mortgage loans drawn down grew 23.5% to $23.3bn in September

Outstanding mortgages increased as well.

The September mortgage survey showed new mortgage loans drawn down increased to HK$23.3bn, up 23.5% m/m (August: +1.4%).

According to a research note from Barclays, outstanding mortgages increased 1.0% m/m as new mortgage loans booked offset principal repayments.

Further, demand for mortgages has picked up after the government fine tuned the Double Stamp Duty (DSD) rule in mid-May 2014.

Barclays noted that there has been a continued shift from Prime to Hibor-based mortgages since 3Q13 with the proportion of Hibor based out of total new mortgages approved at 83% (vs. 26% in September 2013).

The average system mortgage rate increased slightly to 2.24% (August: 2.23%) on its calculations.