14 July 2014 - The Hong Kong Monetary Authority has introduced six rounds of "countercyclical" supervisory measures for containing the supply of mortgage credit during the upward cycle experienced since 2009.

 

Local newspapers reported that Hong Kong Monetary Authority chief executive Norman Chan Tak-lam wrote on the HKMA website and concluded that the latest figures have shown the effectiveness of the six rounds of "countercyclical" supervisory measures, saying the average loan-to-value ratio of new residential mortgages has dropped by nine percentage points to about 55 percent in recent months compared with 64 percent in September 2009.

 

The debt servicing ratio also fell six percentage points to 35 percent from 41 percent in 2010. The annualized growth in outstanding residential mortgages by banks has dropped to 4.2 percent since the second quarter of 2013.

 

Chan also said that once the property market's downward cycle can be confirmed, the supervisory measures introduced earlier can be relaxed as appropriate. However he added since there is no way of foreseeing the start of the downward cycle, or its speed and magnitude, the de facto central bank will have to closely monitor market developments and deploy appropriate measures to adjust the supply of mortgage credit by banks.