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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority announced today (August 3) the results of its latest survey on residential mortgage loans (RMLs) in negative equity*.
The estimated number of RMLs in negative equity declined to 3,767 cases** at end-June 2009 from 9,553 cases at end-March 2009. The aggregate value of RMLs in negative equity declined to HK$8.1 billion at end-June 2009 from HK$21.4 billion at end-March 2009.
The unsecured portion of these loans declined to HK$0.6 billion. The loan-to-value ratio of the RMLs in negative equity edged down to 108% from 111% at end-March 2009. The three-month delinquency ratio*** of the RMLs in negative equity rose to 0.17% from 0.12% at end-March 2009, owing to a greater decline in the total amount of RMLs in negative equity as compared to the decline in the delinquent amount.
* The mortgage portfolio of the surveyed authorized institutions represents about 98% of the industry total. The survey results have been extrapolated to approximate the position of the banking sector as a whole.
** The figures derived from the survey relate only to RMLs provided by authorized institutions on the basis of first mortgages and which the reporting institution knows to be in negative equity (i.e. the outstanding loan amount with the reporting institution exceeds the current market value of the mortgaged property). Not included in these figures are some RMLs associated with co-financing schemes which would be in negative equity if the second mortgages were taken into account. The extent to which such RMLs are in negative equity is not known because authorized institutions do not maintain records on the outstanding balances of the second mortgages.
*** RMLs in negative equity delinquent for more than three months as a percentage of total RMLs in negative equity.
For further enquiries, please contact:
Peggy Lo, Manager (Communications), at 2878 1687 or
Hing-fung Wong, Manager (Communications), at 2878 1802
Ends/Monday, August 3, 2009
Issued at HKT 17:03
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