South korea: South Korea's household credit reached a record high in the third quarter, though its growth slowed due to tighter lending regulations, central bank data showed Tuesday. Outstanding household credit had stood at 1,968.3 trillion won (US$1.34 trillion) as of end-September, up 14.9 trillion won from three months earlier.
According to Yonhap News Agency, the preliminary data from the Bank of Korea (BOK) marks the highest since the BOK began compiling relevant data in 2002. This also represents the sixth consecutive quarterly increase, although the growth decelerated significantly from a 25.1 trillion-won rise in the second quarter. Household credit encompasses credit purchases and loans provided to households by financial institutions.
In detail, household loans stood at 1,845 trillion won at the end of September, increasing by 12 trillion won from three months earlier. Of this total, mortgage lending rose by 11.6 trillion won to 1,159.6 trillion won, a slowdown from a 14.4 trillion-won increase in the previous quarter. Meanwhile, credit purchases climbed 3 trillion won on-quarter to 123.3 trillion won, accelerating from a 1.5 trillion won rise in the second quarter.
"The increase in credit purchases was driven by heightened summer holiday spending and greater demand for paying property taxes," BOK official Kim Min-soo explained during a press briefing. He further noted that "the slower growth in household credit was largely attributable to government regulations. The additional measures announced in October to ease conditions in the property market are expected to help stabilize the pace of mortgage lending."
The government has implemented various measures to cool the overheated housing market and curb household debt. Under the latest policy package announced on Oct. 15, the government designated 21 additional districts in Seoul as speculative zones, thereby bringing all 25 districts in the capital under stricter regulations. These measures also tightened lending rules, reducing the cap on mortgage loans to as little as 200 million won, down from the 600 million-won limit set in June.