Slowed Compared to August with Record Monthly Increase
But Weekly Basis Shows Growth... Uncertainty Remains
As financial authorities strengthen household loan management, banks have raised lending thresholds, resulting in a slowdown in the growth of household loans at major banks. However, the increase in mortgage loans on a weekly basis has expanded this month, making it difficult to be assured that the household loan growth trend is slowing down significantly.
According to the financial sector on the 18th, the outstanding balance of mortgage loans (including jeonse deposit loans) at the five major banks (KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup) as of the 12th was 570.8388 trillion won, an increase of 2.1772 trillion won compared to the end of August (568.6616 trillion won).
This marks a slowdown compared to the record monthly increase in August (8.9115 trillion won).
Since July, banks have raised household loan interest rates and implemented strong loan suppression measures such as conditional suspension of jeonse deposit loans, reduction of mortgage loan limits, and shortening of loan maturities, which appear to have taken effect with a time lag.
Additionally, a base effect is believed to have played a role due to a surge in last-minute loan demand ahead of the implementation of the second phase of the stress total debt service ratio (DSR) regulation starting from the 1st of this month.
During the same period, credit loans increased by only 104.3 billion won (from 103.4562 trillion won to 103.5605 trillion won).
The total household loan increase at the five major banks this month was 2.069 trillion won (from 725.3642 trillion won to 727.4332 trillion won).
However, on a weekly basis, the growth in mortgage loans has accelerated.
The increase in mortgage loans at the five major banks was 883.5 billion won until the 5th, but grew to 1.2937 trillion won from the 6th to the 12th.
Moreover, the increase per business day slightly expanded (from 220.9 billion won to 258.7 billion won), and considering that the five major banks securitized about 494.9 billion won worth of policy loans last week and removed them from their books, the mortgage loan growth does not seem to be easily controlled.
Inside and outside the financial sector, the prevailing opinion is uncertain whether the slowdown in household loan growth will continue in the long term.
This is because risk factors related to household loans remain, such as expectations of rising housing prices, moving season demand, and prospects of policy interest rate cuts.
On the 12th, the Bank of Korea stated in its Monetary and Credit Policy Report, "There is significant uncertainty regarding the future trend of housing price increases in the metropolitan area and the prolongation of household loan growth," adding, "The market expects short-term instability to continue, but there are views that it will gradually stabilize afterward, as well as opinions that instability may persist long-term."
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