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Following is a question by the Hon David LI Kwok-po and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (November 11):
Question:
In July this year, the Government Economist stated that the mortgage payment for a flat of 450 square feet then represented only 35% of the median household income whereas in 1997, the ratio was 90%. Taking the two periods from July 1996 to June 1997 and from July 2008 to June 2009 as reference, will the Government inform this Council:
(a) whether it knows the total new property mortgage loans granted respectively to end users and investors by month;
(b) of the mortgage-to-income ratio in respect of new property mortgage loans granted by month;
(c) whether it knows the ratio of average down payment to property value in respect of new property mortgage loans granted by month; and
(d) of the factors, apart from the above parameters, that the Government considers when assessing the affordability of the buyers in the property market?
Reply:
President,
My reply to the four parts of question is as follow:
(a) According to the data of the Residential Mortgage Survey of the Hong Kong Monetary Authority (HKMA), the total amount of new mortgage loans drawn down by month for the periods from July 1996 to June 1997 and July 2008 to June 2009 respectively are as shown in the table below. The Residential Mortgage Survey does not have breakdown of the new mortgage loans by end-users and investors.
Year/Month HK$ Year/Month HK$
Million Million
July 1996 – June 1997 July 2008 – June 2009
July 1996 17,659 July 2008 17,318
August 1996 13,397 August 2008 12,197
September 1996 11,673 September 2008 11,641
October 1996 15,499 October 2008 11,344
November 1996 16,807 November 2008 8,121
December 1996 19,544 December 2008 7,226
January 1997 20,626 January 2009 6,145
February 1997 18,799 February 2009 7,110
March 1997 16,797 March 2009 8,922
April 1997 22,713 April 2009 10,643
May 1997 26,047 May 2009 15,163
June 1997 25,529 June 2009 20,385
(Note: The data in the Residential Mortgage Survey includes only the residential mortgage loans extended to private individuals by surveyed banks, and does not represent all mortgage loans.)
(b) The Government does not have information on the monthly mortgage-to-income (M-to-I) ratio of new property mortgage loans granted. However, the Rating and Valuation Department compiles M-to-I ratio which is based on the assumptions that private households with median household income buy a flat of 45 square metres and take out a 20-year mortgage loan at a 70% loan-to-value ratio and an average effective mortgage rate. On the basis of the aforementioned formula, the M-to-I ratio for 1996, 1997, 2008 and 2009 are as below –
Year Annual Average M-to-I ratio
1996 67%
1997 87%
2008 35%
2009 34% (as at Quarter 2)
(c) HKMA does not keep record on the "down payment-to-value ratio". However, it keeps record on the loan-to-value ratio by month. With the data on the loan-to-value ratio by month, HKMA can work out the "down payment-to-value ratio" by month.
As HKMA has started compiling the loan-to-value ratio only since June 1998, the "down payment-to-value ratio" for the period from July 1996 to June 1997 cannot be worked out. The "down payment-to-value ratio" for the period from July 2008 to June 2009 is as below –
Month/Year Down payment-to-value ratio
July 2008 37.3%
August 2008 36.1%
September 2008 36.1%
October 2008 38.5%
November 2008 39.3%
December 2008 38.5%
January 2009 35.8%
February 2009 37.0%
March 2009 35.2%
April 2009 34.7%
May 2009 34.8%
June 2009 34.1%
(Note: The "down payment-to-value ratio" is derived from 100% minus the "loan-to-value ratio".)
(d) When assessing the affordability level in the property market, apart from making reference to the M-to-I ratio, the Government also makes reference to other factors such as the interest rate for mortgage loans and the number of transactions of residential properties below $2 million.
Ends/Wednesday, November 11, 2009
Issued at HKT 12:30
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