New mortgage lending increased in October following strong growth in new approvals in September.

The Monetary Authority said new loans drawn down rose 45% to $8.5 billion. Reflecting the pick-up in property market activity, new approvals went up 39.7% to a record $10.5 billion since June 2002.

New approvals for primary and secondary market transactions grew 53.1% and 34.5% respectively. New applications for mortgages increased 17%.

The proportion of new approvals priced at more than 2% below the best lending rate increased to 94.2% from 92.9% in September, and the proportion at more than 2.5% below the best lending rate increased further to 62.1%.

The outstanding amount of mortgage loans increased 0.1% to $521.2 billion.

The declining trend of the mortgage delinquency ratio continued, dropping to 0.99% from 1.05% in September. Although the rescheduled loan ratio edged up to 0.56%, the combined ratio improved to 1.55% from 1.60% in September.

Authority Deputy Chief Executive William Ryback said: "Reflecting the improving domestic economic conditions, the asset quality of banks' mortgage portfolios has continued to improve, with the mortgage delinquency ratio falling to less than 1%, the lowest level since February 1999."

New loans drawn down for purchasing properties on the Mainland shrank to $167 million. The amount of outstanding loans remained unchanged at $6.4 billion.