Banks' household loan growth slows for 2nd straight month

Household loans provided by banks experienced their slowest growth in four months, as revealed by central bank data on Wednesday. Despite this, mortgage lending seemed to be accelerating. According to the Bank of Korea (BOK), outstanding household loans extended by banks reached 1,198 trillion won ($893 billion) last month, marking a 3.4 trillion won increase from the previous month.

This represented the smallest monthly growth since April, when loans grew by 2.1 trillion won. However, mortgage loans increased by 4 trillion won month-over-month in August, bringing the total to 952.5 trillion won. In contrast, other types of household loans declined by 600 billion won to 244.9 trillion won. An official from the central bank suggested that the rise in housing transactions in the greater Seoul area in May, coupled with homes becoming available for occupancy in July and August, had driven up the demand for mortgage loans.

The official emphasized the need to adopt a wait-and-see approach to the potential impact of real estate policies announced in August.