Mortgages jumped by W3T in JulyThe outstanding balance of mortgage loans at seven major commercial lenders increased by more than 3 trillion won in July, data compiled from banks showed.
The balance includes government-backed fixed-rate mortgages offered in March and April that have been securitized by banks via the Korea Housing Finance Corp amounting to around 2.8 trillion won.
Excluding those fixed-rate mortgages, also called Anshim Jeonwhan (meaning converting to safer loans) mortgages, the outstanding mortgage balance at seven major banks including Kookmin, Shinhan, Woori, Hana, Korea Exchange Bank, Nonghyup and Industrial Bank of Korea stood at around 321.57 trillion won, up 527 billion won from June’s 321.04 trillion won.
But including the government-backed mortgage loans, the balance growth stood at 3.38 trillion won, the first time the increase has topped 3 trillion won in July since 2010.
July has traditionally been a slow month in the local real estate market.
Outstanding mortgage balance at major banks in July had increased by 2.5 trillion won last year amid expectations of a real estate market recovery following a series of deregulatory measures.
But from 2010 to 2012, the outstanding mortgage balances in July saw month-on-month declines of 1.2 trillion won, 1.6 trillion won and 680 billion won respectively.
Analysts say the unusual increase in mortgages was due to an increase in home sales volume as housing demand has gone up amid a scarcity of homes available for jeonse rentals and the current low interest rate environment.
According to a real estate portal operated by the Seoul Metropolitan Government, home sales in July were 11,634, up 88.7 percent from a year earlier’s 6,164. It was also up nearly 450 percent from 2013’s 2,118.
“People who could not find jeonse rentals are buying homes now,” said Lee Hoe-jung, a researcher at Hana Institute of Finance.
“The volume of new mortgages will probably rise until next year, when the government’s new mortgage loan measures with tighter issuing standards are scheduled to be enforced.”
BY PARK JUNG-YOUN [email@example.com]
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