Macao moves to regulate local mortgage market

        MACAO, May 7 (Xinhua) -- The Monetary Authority of Macao has said that it would further regulate the local mortgage market by setting a lower loan-to-value (LTV) ratio and adopting other more prudent requirements for the sector, the Macao Post Daily reported on Friday.

        The LTV ratio guideline, which the Monetary Authority was drafting, would help local banks to maintain continued stability in the face of market competition, the daily quoted a statement from the Monetary Authority as saying. However, the Authority did not say when the new guideline will be announced.

        The LTV ratio expresses the amount of a first mortgage lien as a percentage of the total appraised value of the property.

        The Monetary Authority said in the statement that mortgage- related credit accounts for a significant part of local banking business, because of which Monetary Authority requires and reminds banks to stay vigilant and remain prudent.

        Meanwhile, unspecified events in the past in the mortgage market have caused concern, such as the lowering of interest rates and the granting of credit at 90 percent or above the LTV ratio, the Authority also said.

        Macao's newly approved residential mortgage loans reached 18. 99 billion patacas (2.37 billion U.S. dollars) by the end of last year, while newly approved commercial real-estate loans stood at 14.21 billion patacas (1.78 dollars), according to the figures from the Monetary Authority.