Residential mortgage loans in negative equity December quarter 2018
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The Hong Kong Monetary Authority announced today (January 31) the results of its latest survey on residential mortgage loans (RMLs) in negative equity.
The estimated number of RMLs in negative equity at end-December 2018 was 262 cases. This was the first time the surveyed authorised institutions reported negative equity cases since end-December 2016. These cases were related to bank staff housing loans or RMLs under mortgage insurance programme, which have higher loan-to-value ratios.
The aggregate value of RMLs in negative equity at end-December 2018 amounted to HK$1,189 million and the unsecured portion of these loans amounted to HK$58 million.
Since the first quarter of 2011, there have been no RMLs in negative equity with delinquencies of more than three months.
It is important to note that the figures derived from this 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 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.
The mortgage portfolios of the surveyed authorised institutions represent about 99 per cent of the industry total. The survey results have been extrapolated to estimate the position of the banking sector as a whole.
Ends/Thursday, January 31, 2019
Issued at HKT 16:30
Issued at HKT 16:30
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