An onslaught of supply in Seoul rouses property seekers into borrowing mode
South Korea recorded its fastest increase in mortgage loans in June, thanks to an upswing in residential property supply.
With 26,000 new apartment units coming into metropolitan Seoul’s supply, the nation’s five major commercial banks saw their balance in mortgage-backed loans hit KRW421.5 trillion (USD361.2 billion) at the end of last month. The figure is an increase of KRW3.7 won from May, making it the largest monthly increase for 2019.
In comparison, only 11,000 units had been supplied for Seoul and its surrounds in May.
On the flipside, personal credit loans registered one of their slower months in June. As of the end of the month, the banks’ balance in credit loans reached just KRW102.4 trillion, a monthly increase of KRW558.3 billion compared with a gain of KRW1.14 trillion in May. Lenders attributed May’s buoyant balance to high consumption during Children’s Day and Parents’ Day, which are money-oriented holidays in Korea.
Similarly, the balance of household debts in the country decelerated to an increase of just KRW3.77 trillion in June, compared with the KRW3.9 trillion rise in May. A weak growth in credit loans saw household debt balance hit KRW587.25 trillion toward the end of June.
Meanwhile, the balance of loans extended by individual business owners, which include self-employed individuals, gained KRW1.37 trillion between May and June to stand at KRW230.45 trillion. The figure held steady from the monthly increase in May.
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