Mortgage loans approved down 23% in December 2010

New mortgage loans drawn down during December rose by 11.3% to $31 billion compared with November.

According to Hong Kong Information Services Department, new loans approved in December declined by 23% to $28.9 billion.

According to figures released by the Monetary Authority, approvals for secondary market transactions fell by $5.6 billion or 22.2%, and those for refinancing transactions fell by $1.6 billion or 18.2%. Approvals for primary market transactions fell by $1.4 billion or 41.2%.

The number of new applications declined by 37.5% to 14,416. The decline in new loan applications and approvals reflects the market situation following the November 19 announcement of the measures the Government introduced Government in respect of the property market and by the Monetary Authority in relation to authorised institutions' risk management of their property-related lending.

About 9% of the new mortgage loans approved in December were priced with reference to best lending rates. The majority of these loans were in the price range of 2% to less than 2.25%.

The proportion of new mortgage loans priced with reference to HIBOR fell to 90% from 91.8% in November.

The outstanding value of mortgage loans increased 1.2% to $740.3 billion.

The mortgage delinquency ratio fell to a record low of 0.01% while the rescheduled loan ratio remained unchanged at 0.04% in December.