HONG KONG: Hong Kong reported 48 cases of residential mortgage loans in negative equity in the second quarter of 2011, down 18.6% from 59 cases in the first quarter.

Data from the Hong Kong Monetary Authority showed the aggregate value of loans in negative equity declined to HK$58 million (RM22.04 million) as of the end of June, from HK$72 million in March.

The unsecured portion of these loans decreased to around HK$18 million from HK$22 million three months earlier.

The loan-to-value ratio of the loans was steady at 145%.

Since the first quarter of 2011, there have been no residential mortgage loans in negative equity with delinquencies of more than three months, the HKMA said in a statement.

Loans in negative equity mean the outstanding loan amount exceeds the market value of the mortgaged property.

Hong Kong, home to the world's most expensive residential and office properties, has seen housing prices rise 12.5% this year, surpassing 1997 peaks amid low interest rates, buying by mainland Chinese investors, and strong economic growth.

Hong Kong Chief Executive Donald Tsang said earlier this month the government was considering the resumption of building subsidised housing for sale and would address this in his annual speech in October, as part of measures to try and cool the market. — Reuters

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