*************************************************

Activity in residential mortgage loans increased further in July, according to the Hong Kong Monetary Authority's (HKMA) monthly survey of residential mortgage lending.

The value of new loans drawn down during the month rose significantly by 27.3% to HK$6.7 billion. In line with an increase in loan applications, new approvals also increased markedly by 30.0% to a ten-month high of HK$8.8 billion. The increase was mainly attributable to the strong growth in approvals for primary market transactions, which rose by 44.0% in value terms and 62.3% in number terms.

The proportion of new approvals priced at more than 2% below the best lending rate was 92.4%, similar to that in June.

The outstanding amount of mortgage loans declined by another 0.3% to HK$522.2 billion.

The mortgage delinquency ratio improved to 1.10% from 1.12% but the rescheduled loan ratio increased to 0.55% from 0.53%. The combined ratio thus remained unchanged at 1.65%.

"The survey results reflect the continued pick-up in property market activity, following SARS," said Mr David Carse, Deputy Chief Executive of the HKMA. "It is also encouraging that the combined ratio of delinquent and rescheduled loans remained stable."

New loans drawn down for purchasing properties in Mainland China increased by a quarter to HK$119 million. The amount of outstanding loans at end-July was HK$6.2 billion.

For further enquiries, please contact:

Jasmin Fung, Manager (Press), at 2878 8246 or

Thomas Chan, Senior Manager (Press), at 2878 1480

End/Thursday, August 28, 2003

NNNN