June Housing Loan Increase of 6.1 Trillion Won... Largest Growth This Year

Household Loans Increase by 4.4 Trillion Won

In June, housing mortgage loans across the entire financial sector showed the largest increase this year. The financial authorities explained that this was mainly due to the continued expansion of mortgage loan growth in the banking sector from the previous month.

According to the "Household Loan Trends for June 2024 (Preliminary)" released by the Financial Services Commission on the 10th, housing mortgage loans across all financial sectors increased by 6.1 trillion KRW compared to the previous month. This increase was larger than the 5.6 trillion KRW rise in May and marked the biggest increase so far this year. The Financial Services Commission stated, "This is mainly due to the expansion of mortgage loan growth in the banking sector (6.3 trillion KRW), following the previous month (5.7 trillion KRW)." Other loans decreased by 1.7 trillion KRW in the banking sector. This is because the banking sector shifted to a decline (-300 billion KRW) compared to the previous month (300 billion KRW), and the secondary financial sector's decrease widened (-500 billion KRW to 1.4 trillion KRW).

Household loans across all financial sectors increased by 4.4 trillion KRW last month. The increase was smaller compared to the previous month (5.3 trillion KRW). However, there has been a continuous increase for three consecutive months since April (4.1 trillion KRW).

By sector, the increase in household loans in the banking sector was similar to the previous month, while the decrease in household loans in the secondary financial sector widened. Household loans in the banking sector increased by 6 trillion KRW, maintaining the same growth rate as the previous month (6 trillion KRW). The financial authorities analyzed that this was due to the continued growth of policy loans such as Didimdol and Buteemok, and the expansion of mortgage loan growth driven by the recovery in housing transactions.

Household loans in the secondary financial sector decreased by 1.6 trillion KRW due to quarterly write-offs of non-performing loans and other factors. This represented a larger decrease compared to the previous month (-700 billion KRW). Mutual finance (-1 trillion KRW), credit card companies (-300 billion KRW), and savings banks (-300 billion KRW) saw decreases, while insurance increased slightly by 20 billion KRW.

The financial authorities evaluated that household loans in the first half of 2024 are being stably managed within the GDP growth rate. However, they stated, "As the increase in household loans continues mainly in policy loans and banking sector mortgage loans, and considering the possibility of an expanded increase depending on macroeconomic conditions such as interest rates and the housing market, we will carefully manage the situation, including the smooth implementation of Stress DSR Phase 2 from September, to ensure that the household loan growth rate is managed within the GDP growth rate range."