Seoul, South Korea – The rate at which household loans are being extended by five of South Korea’s leading banks has experienced a marked slowdown, according to industry data released Sunday. This deceleration follows the​ introduction of a series of tighter financial regulations designed to curb escalating home prices and ⁢manage growing household debt levels.

Current Loan Statistics

As of Thursday, outstanding⁢ household loans held by⁤ KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup collectively totaled 763.4 trillion won (approximately $545.7 billion USD). This represents an increase of 467.5 billion won as the end of August.

However,the average daily⁤ growth rate ‌for the⁤ period between September 1st and 18th was just 26 billion won. ⁤This is a substantial decrease – an 80% drop – compared to the average daily increase of 126.6 billion won observed the previous month.

Impact of New regulations

A bank official commented, ⁢”The‌ slower pace of household loan growth appears to be a direct result of the property market measures implemented on June 27th.” the official⁤ added that continued‍ monitoring is necessary to determine if this trend will persist throughout ⁣the⁣ remainder of the month.

These measures, introduced in late June, include a 600 million-won cap on mortgage​ loans for property purchases within the capital region. Moreover, home-backed loans have been suspended for individuals who already own multiple properties, a move intended to cool down the overheated housing market.

Recent Market ⁢Activity

Prior to the regulatory changes, housing transactions had seen‍ a surge, particularly in Seoul and its surrounding metropolitan areas. This increase was fueled by banks easing lending restrictions earlier in the year, ⁣coupled with a temporary lifting ⁢of land transaction permit requirements by⁢ the ‍Seoul city government.

The recent slowdown in loan growth suggests the government’s efforts to stabilize the housing market might potentially be gaining traction. Though, the long-term effects of these policies remain to be seen, and ⁤continued analysis of market trends will be crucial.