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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority announced today (February 2) the results of its latest survey on residential mortgage loans (RMLs) in negative equity*.
The estimated number of RMLs in negative equity increased to 10,949 cases** at end-December 2008 from 2,568 cases at end-September 2008. This compares with a peak of about 106,000 cases recorded in June 2003. The aggregate value of RMLs in negative equity rose to HK$24.8 billion at end-December 2008 from HK$6.0 billion at end-September 2008.
The unsecured portion of these loans rose to HK$2.7 billion. The loan-to-value ratio of the RMLs in negative equity rose to 112% from 107% at end-September 2008. The three-month delinquency ratio*** of the RMLs in negative equity fell to 0.05% from 0.08% at end-September 2008, as the numerator (amount of RMLs in negative equity delinquent for more than three months) increased at a pace slower than that of the denominator (total amount of RMLs in negative equity).
* The mortgage portfolio of the surveyed authorised 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 authorised 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 authorised 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:
Thomas Chan, Communications Chief, at 2878 1480 or
Hing-fung Wong, Manager (Communications), at 2878 1802
Ends/Monday, February 2, 2009
Issued at HKT 16:15
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