Bank of Korea Releases First "Household Debt Statistics by Borrower"
New Home Mortgage Loans Hit 227.07 Million Won, Up 17.12 Million Won
New Household Loans Reach 38.52 Million Won, Up 260,000 Won
Driven by Borrowers in Their 30s and 40s (58.3%)
In the third quarter of this year, the number of home purchases in Seoul and the greater metropolitan area increased, particularly among those in their 30s and 40s who took out the maximum possible loans, leading to a record-high amount of new mortgage loans.
A promotional flyer for jeonse loan guidance is posted at a commercial bank in downtown Seoul. Yonhap News
According to the “Household Debt Statistics by Borrower” released by the Bank of Korea on December 22, the average amount of new mortgage loans per borrower in the third quarter was 227.07 million won, up 17.12 million won from the previous quarter. This is the highest figure since the statistics were first compiled in 2013.
By age group, the average amount of new mortgage loans per borrower reached an all-time high for all groups except those in their 60s. Borrowers in their 30s took out the most at 287.92 million won, followed by those in their 40s at 246.27 million won, those in their 20s at 220.07 million won, and those in their 50s at 185.52 million won. Borrowers in their 60s were the only group to see a decrease from the previous quarter, with a drop of 2 million won to 145.76 million won. The largest quarter-on-quarter increase was also among those in their 30s, who borrowed 28.56 million won more than the previous quarter, followed by those in their 40s (22.89 million won) and those in their 20s (17.01 million won).
Regionally, all areas in the metropolitan region, including Seoul, Gyeonggi, and Incheon, recorded all-time highs. In Seoul, the average amount of new mortgage loans per borrower was 359.91 million won, an increase of 42.5 million won from the second quarter. In Gyeonggi and Incheon, the figure rose by 22.81 million won to 243.24 million won. The metropolitan area average increased by 30.45 million won to 279.22 million won. Min Sookhong, head of the Household Debt DB Team at the Economic Statistics Department 1 of the Bank of Korea, noted, "Mortgage loans are generally on the rise in line with the housing market, and recently, the increase has been especially pronounced in the metropolitan area and among those in their 30s and 40s."
Including mortgage loans, the average amount of new household loans per borrower in the third quarter was 38.52 million won, up 260,000 won from the previous quarter. The average amount of new household loans per borrower had been increasing quarter-on-quarter from the third quarter of 2022 to the third quarter of last year, but then declined in the fourth quarter of last year (-3.68 million won) and the first quarter of this year (-850,000 won), before turning to an increase in the second quarter (2.6 million won) and continuing to rise in the third quarter.
By age group, borrowers in their 30s (2.43 million won) and 40s (720,000 won) saw an increase from the previous quarter, while those in their 20s (-700,000 won), 50s (-870,000 won), and 60s or older (-1.03 million won) saw decreases. By region, the metropolitan area (750,000 won), Chungcheong (660,000 won), Honam (340,000 won), and Daegu-Gyeongbuk (1.03 million won) increased from the previous quarter, while the Southeast (-1.33 million won) and Gangwon-Jeju (-1.71 million won) regions decreased.
By type of financial institution, banks (1.59 million won), non-banks (2.32 million won), and others (830,000 won) all saw increases from the previous quarter. By loan product, mortgage loans (17.12 million won), non-housing secured loans (2.69 million won), and jeonse loans (3.55 million won) all increased, while credit loans (-3.85 million won) decreased. Other loans remained flat.
At the end of the third quarter, the average household loan balance per borrower was 96.74 million won, up 560,000 won from the previous quarter. Mortgage loans increased by 2.1 million won to 156.26 million won. In terms of the share of total loan amounts, those in their 30s and 40s accounted for 51.6%, the metropolitan area for 58.9%, banks for 61.8%, and mortgage loans for 51.2%.
Meanwhile, the Bank of Korea has, for the first time, published borrower-specific household debt statistics, compiled based on sample data extracted from the NICE personal credit information database. With this announcement, the Bank of Korea released time series data from the first quarter of 2013 to the third quarter of this year and plans to publish quarterly data every quarter (in February, May, August, and November) starting next year.
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