29/5/2017-7

US interest rate cyclical Hong Kong credit stable ring: young home buyers default risk is not high

Hong Kong’s Hong Kong credit industry analysis report pointed out that Hong Kong last year in interest rates, unemployment and inflation are stable in the low hovering, driving the credit market health and good operation, overdue repayment rate is low, the loan volume also grew steadily. Brendan Le Grange, director of research and consultancy at Hong Kong, said that even if the United States has entered a rate hike cycle, there is no evidence that the robustness of the credit market in Hong Kong will be affected.

30 years old under the new mortgage accounted for 14%

As at the first quarter of this year, a total of 517 000 mortgage loan accounts in Hong Kong increased by 1.91% and 7.63% respectively on a quarterly and yearly basis. That is, each borrower has an average of 1.6 accounts, but the figures have continued to fall for four consecutive quarters. The report predicts that this figure will continue to fall as a result of the Government’s introduction of measures to hold more than one residential property.

After the Government announced in November last year to raise the double stamp duty rate to 15%, many parents appeared on the market in the name of their children to avoid the situation of hot money, and last week, real estate (01113) and the MTR (00066) Cooperation in the development of Tsuen Wan West new sea of ​​love, more about 65% of the buyers for the 30-year-old young people. Le Grange pointed out that the data were lagging behind, so it did not reflect the situation in the first quarter of this year, but in the fourth quarter of last year, 14% of new mortgage loans by 30-year-old contractors, but their default risk is not Higher than the overall level, while the overall new mortgage default risk is also maintained at a low level.

In the first quarter of this year, the mortgage overdue repayment rate (overdue 60 days or more) was 0.06%, down one basis point on a quarterly basis, down 2 basis points year-on-year. Le Grange said that even if overdue repayment occurred, it would depend on whether the property value was sufficient to fill the loan balance and that he had not seen any negative assets at present. To assess whether the mortgage market is safe, the credit card overdue repayment rate is a good indicator, and the current Hong Kong credit card market is still a slow and steady growth, overdue repayment rate is low, so that the mortgage market is still in a safe state.

The credit card market is very saturated

As for credit cards, Le Grange believes the Hong Kong market is very saturated. In the first quarter of this year, Hong Kong consumers had a total of 18.37 million credit cards, representing an average of 4.6 per consumer, down 0.6% and 1.48% respectively. The total amount payable was $ 126.2 billion, an average of 3.9 Million, down 0.6% and 0.78% year-on-year. Consumers overdue repayment rate (overdue 90 days or more) was 0.08%, up 1 point.

He observes that the credit card company’s approval is polarized, that is, it is easier to issue cards to high-end customers, but at the same time tighten the application of the lower credit rating.

The United States has entered a rate hike cycle and is asked whether it will affect the credit market in Hong Kong, Le Grange believes that if the pace of interest rate will be as expected as the market regularly increased by 0.25%, is expected to have little impact on Hong Kong; The impact may be reflected in the interest rate of the loan product, but no matter how the interest rate, financial institutions will continue to provide high-quality consumer discount to attract them to borrow, and these consumers will pay attention to repayment and interest, I believe not Into risk.