The growth pace of household loans has slowed in September amid fresh loan tightening curbs and the extended holiday this month, data showed Sunday.
According to the data, the accumulative household loan balance of the five major banks — KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NongHyup Bank — totaled 728.9 trillion won (US$545.6 billion) as of last Thursday, up by a marginal 2.72 trillion won as of the end of August.
Given that the current pace continues, the monthly total increase for September is expected to stand at around 4.1 trillion won at most, which would be less than half of the rise in August and in line with the increase seen in April.
Mortgage loans, which have been the driving factor in the household loan increase, climbed 2.65 trillion won this month as of last Thursday. Given that the current trend remains in place, the total gain for September is projected to reach around 4 trillion won, or 45 percent of the total increase seen in August.
Market watchers attributed the
slowdown to this month’s extended Chuseok holiday period and tightened government curbs on home loans, as well as lenders’ own measures to restrict loans for home purchases in the greater Seoul area.
“While direct comparison is difficult due to the holiday effect, there is definitely a noticeable difference compared to last month when mortgage loans were issued at record levels and speed,” a market observer said.
The trend has led some in the market to speculate that the South Korean central bank might decide on a change in its monetary policy by lowering borrowing costs as early as next month, in line with a similar move made by the U.S. Federal Reserve this month.
“With increasing pressure to lower rates due to weak domestic consumption and sluggish private spending, if housing prices and household loan indicators improve even slightly, there may be no reason for the central bank to delay a pivot any further,” a financial market watcher said.
Source: Yonhap News Agency