Debt comes to $65,000 for each Korean household

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Debt comes to $65,000 for each Korean household

A single Korean household owes more than 70 million won ($65,000) on average to banks and other financial companies this year as people borrowed to buy homes and invest in real estate and business, government data showed Thursday.

The average household debt was tallied at 70.22 million won as of the end of March this year, up 4.5 percent from a year earlier, according to data compiled by Statistics Korea.

Of the total, 71.2 percent, or 49.98 million won, was financial loans, up 5.9 percent on-year, with the rest in security deposits that must be paid back down the line.

Some 56.5 percent of all Korean households have taken out loans, with these people having on average 88.5 million won in debt, 58.76 million won in income and 424.6 million won in assets.

Their average debt-to-asset ratio reached 18.4 percent in 2017, up 0.1 percentage point from a year earlier, while the debt-to-disposable-income ratio rose 4 percentage points to 121.4 percent.

Household credit is one of the biggest problems in Korea, where family loans surpassed 1,400 trillion won this year on a government-led real estate boom to spur economic growth.

The data from Statistics Korea also showed that an average Korean household held 381.64 million won worth of assets as of the end of March, up 4.2 percent from a year earlier.

The income of an average Korean household rose 2.6 percent from a year earlier to 50.1 million won, including 32.76 million won from earned income and 11.49 million won from business revenue.

The latest survey showed that 17.4 percent of all families were headed by retired householders, who quit their jobs at the age of 62.1, while 62.3 percent of them said they were short of money to earn a living.

Statistics Korea said that it carried out a joint survey with the Bank of Korea and the Financial Supervisory Service on 20,000 households across the country from March 30 to April 14, 2017.

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