[Apartment 'Big Spenders' in Their 30s]③The Return of the Yeongkkeul Group... Household Debt Exceeding 1,000 Trillion Won 'Red Light'

As the apartment 'Yeongkkeul' craze resurges, household loan balances in the banking sector exceeded 1,000 trillion won last month, marking an all-time high. This is attributed to an increase in home purchases and a decrease in lease deposit return loans due to the 'reverse jeonse crisis,' leading to a rise in mortgage loans. There are concerns that if the shock from US interest rate hikes recurs, a financial crisis triggered by household debt could occur due to bankruptcies among Yeongkkeul borrowers.

The reason household loans have increased for three consecutive months recently is due to the rise in mortgage loans. According to the 'Financial Market Trends' announced by the Bank of Korea on the 12th, the balance of household loans (including policy mortgage loans) at deposit banks reached 1,062.3 trillion won as of the end of June, marking the highest balance ever.

Compared to the previous month, household loans in the banking sector had decreased until March this year. However, from April, they turned to an increasing trend (2.3 trillion won), followed by continuous increases in May (4.2 trillion won) and June (5.9 trillion won). The rate of increase is also growing.

In particular, mortgage loans among household loans have increased significantly. Mortgage loans in June increased by as much as 7 trillion won in one month. Compared to the increases in April (2.8 trillion won) and May (4.2 trillion won) this year, the increase has expanded significantly, marking the largest increase in 3 years and 4 months since February 2020 (7.8 trillion won). The Bank of Korea sees that the demand for funds related to home purchases has expanded, along with an increase in move-in volumes and a shift to an increase in jeonse deposit loans, leading to a significant expansion in mortgage loans.

More people are also buying homes using the government policy product, the Special Booming Housing Loan (Teukrye Bogumjari Loan). Initially, many used the Special Booming Housing Loan to refinance at lower interest rates, but now the majority use it for new home purchases.

The supply target for the Special Booming Housing Loan this year is 39.6 trillion won. Since its launch at the end of January, about 28.236 trillion won has been disbursed. Of this, the amount used for 'new home purchases' (15.9191 trillion won) accounts for 56.4%, well over half. The amount used for 'repayment of existing loans' for refinancing (10.1382 trillion won) accounts for 35.9%, and the amount borrowed by tenants to return deposits under the 'lease deposit return' purpose (2.1787 trillion won) accounts for 7.7%.

At the end of March, the proportions of 'new home purchases' (46.0%) and 'repayment of existing loans' (45.4%) among total applications were similar. Since then, as the housing market gradually loosened, the funds used for new home purchases increased. Actual apartment transaction volumes rose from 19,000 units in January last year to 34,000 units in April and 37,000 units in May. Move-in volumes also continued to increase from 22,000 units in January to 28,000 units in May and 42,000 units in June. The market generally expects the increase in household loans due to home purchases to continue.

A financial authority official explained, "Initially, refinancing demand was high, but recently, applications for new home purchases have become much more frequent," adding, "This indicates that demand for home purchases is reviving." However, the official also noted, "Considering that housing transaction volumes are still below the usual levels and that loans for purposes other than home purchases also account for a significant portion, the increase in household loans is not judged to be at a level that raises concerns about overheating due to speculative demand in the housing market."