Hong Kong’s approved mortgage loans rose 29 percent in August from the previous month as used homes transactions surged.
Loans approved totaled HK$25.2 billion ($3.2 billion) last month, with those financing secondary market sales gained 43 percent to HK$18.1 billion, the Hong Kong Monetary Authority said yesterday in a statement on its website. Mortgages drawn- down increased by 1.9 percent to HK$16.4 billion.
The Hong Kong Monetary Authority tightened mortgage lending in September after saying a third round of quantitative easing by the U.S. Federal Reserve risks pushing up home prices. The central bank is limiting the maximum term on all new mortgages to 30 years, and mortgage payments for investment properties can’t be more than 40 percent of buyers’ monthly incomes, up from the the previous 50 percent.
“As the property market became more active in August, the number of new mortgages greatly increased,” said Sharmaine Lau, Hong Kong-based chief economist at mReferral Mortgage Brokerage Services. “There’s ample room for mortgage drawn-down to increase in September.” The impact of the new mortgage guidelines may be seen in the fourth quarter, Lau said.
The city’s Chief Executive Leung Chun-ying announced this month he will restrict buyers of apartments built on two sites scheduled to be on sale next year to local residents. The government also pledged to speed up approval of permits for private project sales.
Hong Kong’s home prices have surpassed their peak in October 1997, which marked the start of a 70 percent decline to August 2003, according to the Centaline Property Agency Ltd. They have soared 240 percent since that trough nine years ago.
In August, the mortgage delinquency ratio and rescheduled loan ratio were both unchanged at 0.01 percent, HKMA data show.
To contact the reporter on this story: Fion Li in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: James Regan at email@example.com