Household Loans in Bank Sector Increase for Second Consecutive Month Due to Demand for Housing Loans and Slowdown in Jeonse Transition

[시사저널e=길해성 기자] Household loans in the bank sector increased for the second consecutive month. Demand to buy houses continued and the transition from jeonse to monthly rent slowed down, largely contributing to a significant increase in housing mortgage loans.

According to the ‘Household Loan Trends’ announced by the Financial Services Commission and the Financial Supervisory Service on the 9th, household loans in the entire financial sector, including banks and the second financial sector, increased by 2.8 trillion won last month. Overall household loans in the financial sector increased by 200 billion won in April, turning to an upward trend for the first time in eight months.

Looking at each loan item, the rate of increase in the outstanding loan balance increased for the third straight month. In the case of mortgage loans, it increased by 3.6 trillion won. This is the effect of a decrease of 600 billion won in the secondary financial sector, while a 4.3 trillion won increase in the bank sector.

By sector, household loans in the banking sector increased, while household loans in the secondary financial sector decreased. Last month, household loans in the bank sector increased by 4.2 trillion won, maintaining the upward trend for the second month in a row. This was mainly due to a 4.3 trillion won increase in bank deposits. Bank loans for lease decreased by 600 billion won, while policy mortgages (2.8 trillion won), general individual loans (2 trillion won), and group loans (100 billion won) all increased.

On the same day, the Bank of Korea also announced ‘Financial Market Trends in May 2023’, but as of last month, the balance of household loans in the bank sector was 1056.4015 trillion won, an increase of 4.199 trillion won compared to the previous month. Household loans in the banking sector showed a downward trend until March of this year, then turned to an upward trend in April and then expanded for two consecutive months. The increase was the largest in 19 months since October 2021 (5.2 trillion won).

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An increase in mortgage loans contributed to the increase in household loans. The size of the increase in the amount of debt increased from 2.3 trillion won in March and 2.8 trillion won in April to 4.3 trillion won last month. This is also the largest increase in 19 months since recording 4.7 trillion won in July 2021.

In the market, it is believed that the recent increase in apartment sales transactions has increased the demand for housing purchase funds. According to the Ministry of Land, Infrastructure and Transport, apartment sales increased from 31,000 units in January this year to 31,000 units in February, and recorded 35,000 and 33,000 units in March and April, respectively.

Last month, Jeonse loans decreased by 600 billion won compared to the previous month, continuing the decline for the 7th consecutive month. However, the slowdown is abating as demand rises again. Previously, the balance of leasehold deposit loans began to decrease from November of last year (-1 trillion won), followed by December (-400 billion won), January this year (-1.8 trillion won), February (-2.5 trillion won), and March (-2.5 trillion won). -2.3 trillion won), then decreased until May (-600 billion won), but the decline seems to be slowing down.

Yoon Ok-ja, deputy head of the market management team at the Bank of Korea’s Financial Markets Bureau, said, “The increase in housing sales in February and March was reflected in the housing mortgage loan in May after showing a lag of two to three months.” “The pace of increase in household loans expanded last month due to a combination of factors such as continuing demand for funds to purchase houses, a decline in interest rates for bank deposits, and easing of real estate regulations,” he explained.

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2023-06-10 09:57:28
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