Decline in Mortgage Applications in Hong Kong in May 2024 📉
The Hong Kong Monetary Authority (HKMA) recently released the residential mortgage survey results for May 2024, revealing a substantial decrease in mortgage applications. According to the HKMA, the number of mortgage applications dropped by 16.1% month-on-month, totaling 8,077 applications.
Increase in Mortgage Loans Approved 📈
Despite the decline in applications, the approved mortgage loans in May saw an 8.8% increase compared to April, reaching a total of HK$31.6 billion. Notably, mortgage loans for primary market transactions rose by 3.7% to HK$11.5 billion, while those for secondary market transactions climbed by 14.9% to HK$17.6 billion. However, mortgage loans for refinancing experienced a decline of 4.8%, amounting to HK$2.5 billion.
Surge in Drawn Down Mortgage Loans 💰
During May, the amount of mortgage loans drawn down surged by 27% compared to the previous month, reaching HK$16.5 billion. This indicates a robust uptake in the actual disbursement of approved loans.
Changes in Loan Pricing 💵
There was a slight shift in the pricing of new mortgage loans. The ratio of new mortgage loans priced with reference to the Hong Kong Interbank Offered Rate (HIBOR) decreased marginally from 93% in April to 92% in May. On the other hand, the ratio of new mortgage loans priced with reference to best lending rates increased from 2.2% in April to 3.5% in May.
Outstanding Mortgage Loans and Delinquency Ratios 🏦
The outstanding value of mortgage loans saw a minor month-on-month increase of 0.2%, amounting to HK$1,856.1 billion at the end of May. Both the mortgage delinquency ratio and the rescheduled loan ratio remained stable, with the former at 0.09% and the latter near 0%.
Closing Thoughts 💭
In conclusion, the residential mortgage survey results for May in Hong Kong reflect a notable decrease in mortgage applications but an increase in approved loans. The drawn down mortgage loans also saw a significant surge, indicating strong disbursement activity. Changes in loan pricing were observed, with a slight shift in the reference rates. The stability of outstanding mortgage loans and delinquency ratios is a promising sign for the market. For more detailed information, the full report can be accessed through the official HKMA website.
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