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Household borrowing rises sharply in April on increased home transactions

Published: 14 May. 2025, 14:42

Apartment complexes in Seoul as seen from Namsan in central Seoul on April 28 [YONHAP]

Household loans extended by banks rose markedly in April, central bank data showed Wednesday, driven by a rise in housing transactions following state deregulatory measures.

Outstanding household loans totaled 1.15 quadrillion won ($813.65 billion) as of the end of April, up 4.8 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

It marked the third consecutive monthly increase and a sharp acceleration from the 1.6 trillion won increase seen in March.

"Home transactions increased markedly in February and March, and their impact on loans had materialized in the following months," BOK official Park Min-cheol said.

According to the data from the Ministry of Land, Infrastructure and Transport, apartment transactions nationwide jumped to 50,000 cases in March from 26,000 in January and 38,000 in February. The data for April is yet to be available.

In Seoul, the number of apartment contracts rose from 3,300 in January to 6,200 in February and further to 9,300 in March.

The increase in housing transactions followed the loosening of regulations on household lending by banks earlier this year.

An apartment complex in Korea [JOONGANG ILBO]

In addition, the Seoul municipal government eased the so-called land transaction permission scheme, requiring approval from local authorities for any apartment transactions, in parts of the city's wealthy districts in mid-February. But it was reinstated just a month later after a sharp rise in real estate prices in those areas.

Home-backed loans rose by 3.7 trillion won in April from the previous month, reaching 913.9 trillion won as of end-April. The growth marked an acceleration from a 2.5 trillion won increase logged in March.

Unsecured and other types of household loans also increased, climbing 1 trillion won to 235.3 trillion won.

Corporate loans rose sharply, as the government ramped up financial support for businesses amid growing concerns over the Donald Trump administration's sweeping tariff measures.

Loans to companies jumped by 14.4 trillion won in April, reversing a 2.1 trillion won on month decline in March.

Outstanding corporate loans stood at 1.39 quadrillion won as of the end of April, the BOK said.

Yonhap