Increase in Household Loans by Major S. Korean Banks Reaches $1.7 Billion in April
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Synopsis
Household loans from five significant banks in South Korea surged by 2.5 trillion won ($1.7 billion) in April, according to recent industry data. The rise is attributed to the lifting of transaction permissions in select affluent districts, which has spurred home transactions and mortgage demand.
Key Takeaways
- Household loans rose by 2.5 trillion won this April.
- Five banks reported a total of 741.509 trillion won in loans.
- Government lifted transaction permission in certain districts.
- Home-backed loans increased by approximately 1.52 trillion won.
- New permission system affects 400,000 households.
Seoul, April 20 (NationPress) Household loans provided by five prominent banks in South Korea have increased by 2.5 trillion won ($1.7 billion) this month, as per industry data released on Sunday.
The total amount of household loans from these five commercial banks, which include KB Kookmin Bank, Shinhan Bank, and Hana Bank, reached 741.509 trillion won as of Thursday, according to the banks' data.
This rise follows the government's decision to lift the land transaction permission system in February for certain areas in Seoul's affluent districts of Gangnam, Seocho, and Songpa, resulting in a notable increase in home transactions and a heightened demand for mortgage loans, as reported by Yonhap news agency.
The Seoul government reestablished the permission system for these areas in March, emphasizing the necessity to control a recent spike in household debts and escalating home prices.
Loans secured by homes rose by approximately 1.52 trillion won this month, partly driven by expectations of interest rate reductions.
"There is typically a stronger demand for loans, while some clients appear to be borrowing funds for investments as both domestic and international stock markets remain volatile," stated an industry official.
In related news, the Seoul city government announced that it will temporarily reinstate the land transaction permission system in four affluent districts of the capital to aid in stabilizing the real estate market, shortly after lifting the same regulations in two of those districts.
The government has classified the Gangnam, Seocho, Songpa, and Yongsan districts as areas requiring permission for six months, from March 24 to September 30, according to a press release from the Ministry of Land, Infrastructure and Transport.
This permission system mandates that government approval is needed for property transactions exceeding a specified size within the designated areas.
Approximately 400,000 households residing in the four districts' 2,200 apartment complexes will be impacted by this system over the next six months, the release stated.
