Mortgage loans rebounds at unremarkable 9.8%

It shows slow property transactions.

According to Barclays, while the February mortgage survey showed new mortgage loans drawn down slightly rebounded to HK$11.4bn, +9.8% m/m (vs -6.2% m/m in January), the amount was still at low level, showing a continuation of slow property transactions and weaker sentiment.

However, outstanding mortgages only inched up by 0.5% m/m, as new mortgage loans booked offset principal repayments.

Here’s more from Barclays:

The proportion of Prime-based mortgages that are priced below 2.25% (effective rate) reduced to 36.7% in February (vs. 48% in January), reflecting easing pricing competition.

Hibor-based mortgages rose to 54.8% up from 41.7% in January.

Overall, we estimate that the average system mortgage rate was stable at 2.18% and is unlikely to fall substantially lower due to the 15% mortgage risk weight floor limit imposed by the HKMA since February 2013.