New loans approved last month totaled HK$35.4 billion, the Hong Kong Monetary Authority said yesterday.

New mortgages for June were 7.8 percent down from a year ago, while approvals for refinancing loans plunged 21.9 percent from May.

At the same time, a quarterly survey by JPMorgan suggests that potential bubbles in the property market are investors' second-biggest worry.

Twenty-one percent of the 503 investors polled anticipated emerging asset bubbles in property this year.

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JPMorgan investment manager for Greater China Emerson Yip Yee-shun said the property sector has not reached bubble proportions despite record high housing prices and fewer transactions.

Yip believes that real estate is a major driver for the whole economy. With low interest rates and ongoing inflation, investors - especially those from the mainland - will park their cash in property. The latest JPMorgan Investor Confidence Index shows that Hong Kong investors' confidence fell from 128 in the first quarter to 122 in the second quarter.

It also found that 9 percent fewer investors expect the value of their portfolio to gain over the next six months, indicating that overall confidence in SAR prospects is weakening.

High property prices, inflation and the European sovereign debt crisis are the major factors behind the overall pessimistic sentiment. LARRY WONG