[Asia Economy Reporter Kim Min-young] The increase in jeonse loan balances in the banking sector has slowed down. This is attributed to the government's strong loan regulations.
According to the banking sector on the 28th, the outstanding balance of jeonse loans at Shinhan, KB Kookmin, Hana, Woori, and NH Nonghyup banks was 81.9157 trillion won as of the end of last month, an increase of 26.9% (17.3505 trillion won) compared to January last year.
The growth rate compared to the same period last year has been slowing down, with 30.1% in October, 28.6% in November, and 27.3% in December last year, and this trend has continued this year as well.
In particular, compared to the growth rate in January last year (41.1%), the increase in January this year has sharply declined.
This is interpreted as due to the government's strong real estate regulations. In November last year, the government decided to restrict new guarantees for jeonse loans from the Korea Housing & Urban Guarantee Corporation for owners of high-priced homes exceeding 900 million won in market value. Subsequently, from last month, private guarantees such as those from SGI Seoul Guarantee Insurance were also restricted.
Since banks do not provide loans without guarantees, this effectively blocked jeonse loans for owners of high-priced homes.
Although the jeonse prices of apartments in Seoul have risen significantly, the transaction volume has decreased.
According to the Korea Real Estate Board, Seoul apartment jeonse prices rose by 0.72% last month, higher than the 0.58% increase in December last year.
The volume of jeonse apartment transactions in Seoul, compiled by the Seoul Real Estate Information Plaza, decreased by 35.7%, from 10,923 cases in December last year to 7,019 cases last month.
The slowdown in the increase of jeonse loans is expected to continue. This is because government regulations will persist, and the shift from jeonse to so-called 'banjeonse' (jeonse deposit + monthly rent) is expected to increase.
As banjeonse increases, the scale of jeonse deposits covered by loans decreases, thus slowing the growth of jeonse loans.
A representative from a commercial bank said, "As demand for banjeonse is increasing in the market, the growth of jeonse loans is slowing down."
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