Central Plains Mortgage: The number of new mortgages approved and newly withdrawn in Hong Kong in October all hit a new low of more than 10 years, structural decline in demand

The Zhitong Finance App learned that according to the latest data released by the Hong Kong Mortgage Corporation, the number of newly approved mortgage insurance cases in October this year fell 2.4% month-on-month to 701, a new low in 128 months (about 10.7 years), while the amount involved rose slightly by 1.1% to $3.9 billion (HK$, same below). The number of new acquisitions during the same period plummeted 40.7% month-on-month to 245, and the amount also fell 43.7% to $1.3 billion, hitting new lows for 128 months (about 10.7 years) and 125 months (about 10.4 years), respectively.

Wang Meifeng, managing director of Central Plains Mortgage, pointed out that in October, the withdrawal of new mortgages recorded a decline of more than 40%, mainly due to the fact that the property market entered a digestion period in the middle of the year, and trading declined markedly compared to the boom market in the first half of the year, which led to a decrease in mortgage applications. The average amount of new mortgage loans drawn down in October was about $5.29 million, down about $290,000 (or 5.2%) from the previous month. First-hand and second-hand properties accounted for 11% and 89% respectively.

Cumulatively, in the first 10 months of this year, 10,408 new approvals were recorded according to the number of insured cases, involving 57 billion yuan, a year-on-year decrease of 23.8% and 16.7%, respectively; the number of new cases covered during the period was 4,678, involving 25 billion yuan, a decrease of 22.5% and 16.1%, respectively.

According to Wang Meifeng's analysis, the overall decline in mortgage insurance figures in the first 10 months was mainly due to the fact that after the full relaxation of the mortgage policy, the upper limit of bank mortgage ratio had returned to 70%, and basically fell back to 30% for the first instalment. Coupled with the recovery in the share of investors entering the market for non-personal use properties, the market's dependence on high-yield mortgage insurance was structurally reduced. The data also showed that the latest guaranteed usage rate fell to 8.6% in September, a new low of more than 7 years since August 2019 (8.4%), in stark contrast to the high of over 30% before the relaxation of the policy.