Household loans at banks rose by 760 billion won in one month

Household loans at deposit banks increased by 7.6 trillion won last month, marking the largest rise in 1 year and 10 months. The Bank of Korea announced these financial market trends on the 9th. The increase in household loans was largely driven by expanded mortgage lending. At the end of June, the outstanding balance of mortgage loans stood at 945 trillion won, up 4.3 trillion won from a month earlier. It was analyzed that this reflected increased home transactions in the greater Seoul area, as well as demand for payment of intermediate installments on apartments that had already been sold. Jeonse loans fell by 700 billion won, declining for 10 consecutive months. The Bank of Korea explained that jeonse transactions continue to decrease while monthly rent conversions continue, and that some jeonse demand is also shifting to housing purchase demand in the outskirts of the greater Seoul area. Other loans increased by 3.3 trillion won as credit loans for stock investment grew alongside the rise in the KOSPI. The Financial Services Commission recently requested financial institutions to strengthen loan management, given the sharp recent increase in household lending. In particular, considering that mortgage loans are executed with a time lag after housing transactions, it said related loan demand could continue for the time being.