Household credit in South Korea extended its record-breaking streak to the third quarter, with its quarterly growth picking up from three months earlier on increased mortgage lending, data showed Tuesday.
Household credit totaled 1,060.3 trillion won (US$952.5 billion) as of end-September, up 22 trillion won from a revised 1,038.3 trillion won in the second quarter, according to the Bank of Korea (BOK).
The third-quarter gain is nearly double the 13.4 trillion won increase in the previous quarter. It also marks the sharpest growth in terms of amount since the fourth quarter of last year when household credit jumped 27.7 trillion won over the quarter.
Household credit refers to credit purchases and loans extended by financial institutions, including commercial lenders and mutual savings banks.
The on-quarter growth was attributed to an increase in mortgage loans.
Outstanding household loans came in at 1,002.9 trillion won as of end-September, up 22.1 trillion won from the previous quarter.
Of the total, mortgage loans extended by banks rose by 12.3 trillion won, quickening from 8.3 trillion won three months earlier.
The figures come on the heels of government measures aimed at bolstering growth and property transactions in Asia’s fourth-largest economy.
In July, Finance Minister Choi Kyung-hwan ambitiously introduced a set of stimulus, including eased lending regulations, such as the loan-to-value (LTV) and debt-to-income (DTI) ratios.
Under the policy that went into effect Aug. 1, homebuyers can borrow up to 70 percent of their property value and use 60 percent of their income for mortgage payments.
Under government pressure for policy coordination, the BOK lowered the base rate in August and in October by a quarter percentage point each to a record low of 2 percent.
Household lending is forecast to soar in the fourth quarter.
Separate data by the central bank showed that household loans extended by banks expanded at the fastest pace in six years in October.
Outstanding household loans by lenders reached 547.4 trillion won as of the end of last month, up 6.9 trillion won from end-September, marking the sharpest monthly growth since the central bank began compiling the data in 2008. (Yonhap)
