Household credit growth accelerates in July despite tighter lending rules
SEOUL-- South Korea's household credit growth accelerated on month in July, the financial regulator said Friday, despite tighter lending rules aimed at reining in household debt.
Household debt grew by 9.5 trillion won (US$8.3 billion) in July, when the tighter lending rules came into force, compared to growth of 7.6 trillion won in June, according to the Financial Services Commission (FSC).
Compared to a year ago, however, household credit edged down 0.04 percent.
Household loans by banks rose by 6.7 trillion won in July, marking the fastest monthly growth in eight months.
The FSC expected the monthly growth of household credit to lose steam this month, when a second round of measures took effect to curb real estate speculation.
Among the measures, the government proposed imposing a higher capital gains tax rate on people who own two or more homes from April next year.
In July, the lending ceiling for homes in government-designated "speculative" areas, including Seoul, was lowered to 40 percent of the property's value, from 50 percent.
The so-called debt-to-income ratio was also reduced to 40 percent of the property's value, from 50 percent.
Source: Yonhap News Agency