Mortgage loans jump 29%

More used homes transactions caused Hong Kong’s approved mortgage loans to rise 29% in August from July.

Approved loans came to HK$25.2 billion last month while those financing secondary market sales gained 43% to HK$18.1 billion, said the Hong Kong Monetary Authority. Mortgages drawn-down increased by 1.9% to HK$16.4 billion.

Analysts noted the property market became more active in August and a large increase in the number of new mortgages. They also believe there is sufficient room for mortgage drawn-down to increase in September.

HKMA tightened mortgage lending in September after the third round of quantitative easing by the U.S. Federal Reserve increased the risk of increasing home prices. It has limited the maximum term on all new mortgages to 30 years, and mortgage payments for investment properties can’t be more than 40% of buyers’ monthly incomes, up from the previous 50%.

In August, the mortgage delinquency ratio and rescheduled loan ratio were both unchanged at 0.01%, HKMA data show.

The number of mortgage applications in August increased by 31.8% month-on-month to 14,023, HKMA said.