Household debt rises with home purchases
The total of home mortgage loans increased by 0.8 trillion won to reach 467.7 trillion won, and other types of loans including credit loans rose by 2.5 trillion won to 295.6 trillion won. The increase in nonmortgage loans has slowed from the 3.2 trillion won seen in June.
In terms of the types of loan issuer, banks saw an increase of 1.1 trillion won in household loans to 528.3 trillion won, and nonbank depository companies like credit unions or the post office, 2.2 trillion won to 235 trillion won.
While household loans issued by depository corporations alone saw a 3.3 trillion won increase, adding in 6.2 trillion won worth of mortgages issued by the Korea Land & Housing Corporation would make the outstanding balance 9.5 trillion won. This is the third-biggest monthly increase ever, after 9.9 trillion won in April and 10.1 trillion won in June.
When counting mortgages handled by the Korea Land & Housing Corporation, mortgages accounted for two-thirds of the total household debt.
“The low interest rates and sharp increase in housing sales continued to fuel household loan growth in July,” a Bank of Korea official said.
Home sales in July were 110,675, up 43.2 percent year-on-year, according to recent Ministry of Land, Infrastructure and Transport data. Home sales in Seoul, where expensive residences are clustered, saw a 101.3 percent increase compared with a year before to 21,382.
Household loans in both metropolitan and nonmetropolitan areas showed increases.
BY PARK JUNG-YOUN [firstname.lastname@example.org]