Financial sectors in Asian economies are dominated by banks, so maintaining their financial stability is crucial. Domestic banking crises often originate in the real estate sector -- the subprime crisis in the United States in 2007 to 2010 was only the most recent example. Therefore, one might conclude that mortgage lending is negative for financial stability.
However, in normal periods, mortgage lending may contribute to financial stability. This is because mortgage loans have different risk properties from assets such as commercial loans, so mortgage loans in a mixed portfolio tend to diversify banks' risks. Also, individual mortgage loans are small, which means they do not contribute much to systemic risk, except in periods of real estate bubbles.