Household borrowing logs sharpest rise in 10 months in June on surging home prices

SEOUL, July 9 (Yonhap) -- Household loans extended by South Korean banks rose by the largest margin in 10 months in June, driven by an increase in housing transactions and surging home prices, central bank data showed Wednesday. Banks' outstanding household loans stood at 1,161.5 trillion won (US$846.08 billion) as of end-June, up 6.2 trillion won from a month earlier, according to the data from the Bank of Korea (BOK). The reading marks the largest on-month gain since August 2024, when household loans rose by 9.2 trillion won. This photo taken July 6, 2025, shows apartment buildings in Seoul viewed from the Seoul Sky observatory. (Yonhap) The growth came as home-backed loans rose by 5.1 trillion won from the previous month, reaching 923.1 trillion won as of end-June. It marked an acceleration from a 4.1 trillion-won increase logged in May. Unsecured and other types of household loans climbed 1.1 trillion won to 237.4 trillion won, the data showed. "Housing transactions increased sharply in May and June, and with a time lag, we expect household loan growth to further accelerate through July and August," BOK official Park Min-cheol said in a press briefing. Home transactions rose markedly following the loosening of regulations on household lending by banks earlier this year and the Seoul city government's partial lifting of its land transaction permission rules. Apartment transactions nationwide jumped to 45,000 in May from 41,000 cases the previous month. In January, the figure was at 26,000. In Seoul, the number of apartment contracts came to 7,300 in May, up from 3,300 in January and 5,000 in April. In the wake of surging real estate prices, the Seoul municipal government reinstated the land permission regulation in March. In an effort to curb rising household debt and housing prices, authorities late last month capped home-backed loans for property purchases in the capital area at 600 million won and implemented a series of other restrictive measures. "It is still too early to assess the effects of the restrictive measures, but they are expected to significantly help slow the growth of household debt," Park said. Meanwhile, corporate loans fell 3.6 trillion won from a month earlier in June, following an 8 trillion-won on-month increase in May, due mainly to companies' temporary repayments to manage financial ratios at the end of the half-year. Outstanding corporate loans stood at 1,343 trillion won as of end-June, according to the data. graceoh@yna.co.kr(END)

https://img.yna.co.kr/etc/inner/EN/2025/07/09/AEN20250709005200320_01_i_P2.jpg

SEOUL, July 9 (Yonhap) — Household loans extended by South Korean banks rose by the largest margin in 10 months in June, driven by an increase in housing transactions and surging home prices, central bank data showed Wednesday.

Banks’ outstanding household loans stood at 1,161.5 trillion won (US$846.08 billion) as of end-June, up 6.2 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

The reading marks the largest on-month gain since August 2024, when household loans rose by 9.2 trillion won.

This photo taken July 6, 2025, shows apartment buildings in Seoul viewed from the Seoul Sky observatory. (Yonhap)

The growth came as home-backed loans rose by 5.1 trillion won from the previous month, reaching 923.1 trillion won as of end-June. It marked an acceleration from a 4.1 trillion-won increase logged in May.

Unsecured and other types of household loans climbed 1.1 trillion won to 237.4 trillion won, the data showed.

“Housing transactions increased sharply in May and June, and with a time lag, we expect household loan growth to further accelerate through July and August,” BOK official Park Min-cheol said in a press briefing.

Home transactions rose markedly following the loosening of regulations on household lending by banks earlier this year and the Seoul city government’s partial lifting of its land transaction permission rules.

Apartment transactions nationwide jumped to 45,000 in May from 41,000 cases the previous month. In January, the figure was at 26,000.

In Seoul, the number of apartment contracts came to 7,300 in May, up from 3,300 in January and 5,000 in April.

In the wake of surging real estate prices, the Seoul municipal government reinstated the land permission regulation in March.

In an effort to curb rising household debt and housing prices, authorities late last month capped home-backed loans for property purchases in the capital area at 600 million won and implemented a series of other restrictive measures.

“It is still too early to assess the effects of the restrictive measures, but they are expected to significantly help slow the growth of household debt,” Park said.

Meanwhile, corporate loans fell 3.6 trillion won from a month earlier in June, following an 8 trillion-won on-month increase in May, due mainly to companies’ temporary repayments to manage financial ratios at the end of the half-year.

Outstanding corporate loans stood at 1,343 trillion won as of end-June, according to the data.

graceoh@yna.co.kr
(END)