Korean household loan growth triples on Seoul mortgage demand

There was an increase in housing transactions in Seoul.

South Korean banks’ extended $4.65b (KRW6.9t) household loans in May, faster than the $1.39b (KRW2.1t) increase in April, on the back of continued strong corporate demand and higher mortgage financing demand.

There are more housing transactions involving low- and mid-priced homes in Seoul during the month, the Bank of Korea (BOK) said.

There is also an increased demand for intermediate payments financing for pre-sold housing units, the central bank said.

In contrast, leasehold deposit loans continued to decline.

Bank lending to the corporate sector continued to grow significantly in May, with $7.06t (KRW10.7t) in loans disbursed, around the same as the previous month.

Lending to small and medium enterprises (SMEs) grew substantially, with $3.76t (KRW5.7t) in loans given out to the sector in May. BOK said that this reflects banks’ continued efforts to expand corporate lending under productive finance initiatives.

(US$1 = KRW 1,514.66)