Resulting from authorities actual property rules such because the “June 27 measures” and mortgage combination administration, family loans from banks in December final yr recorded the biggest lower ever for a similar month. Financial institution mortgage loans alone retreated for the primary time in 2 years and 10 months. Whereas family loans are lowering, housing worth uptrends proceed in Seoul, deepening considerations for monetary authorities.
The Monetary Providers Fee introduced on Jan. 14 that the excellent steadiness of banking sector family loans as of the tip of December final yr was 1,173.6 trillion received, a lower of two.2 trillion received from the earlier month. This marked a return to say no for the primary time in 11 months since January final yr (-500 billion received). Contemplating December alone, the lower scale is the biggest ever recorded.
For banks, each mortgage loans (-700 billion received) and different loans (-1.5 trillion received) contracted. The financial institution mortgage mortgage discount is the primary since February 2023 (-300 billion received). Jeonse deposit loans additionally decreased by 800 billion received, persevering with the decline for 3 consecutive months.
Banking sector family loans proceed to say no this yr as effectively. The family mortgage steadiness of the 5 main industrial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) was 767.419 trillion received as of Jan. 13, a lower of 259.5 billion received in comparison with the tip of final yr. As monetary authorities have established a primary coverage to not loosen the strings of the June 27 measures, the family mortgage slowdown pattern is predicted to proceed this yr. The Monetary Providers Fee emphasised on this present day that “thorough family mortgage administration is important.”
The issue is actual property costs. Regardless of robust mortgage rules since final yr, housing costs should not being managed. Based on KB Actual Property, Seoul condominium costs rose 0.2% within the first week of January, marking the forty ninth consecutive week of enhance. For that reason, authorities are inspecting all playing cards, together with decreasing the debt service ratio (DSR) and extra will increase in mortgage threat weights, below the essential stance of not touching loans for precise customers reminiscent of non-homeowners as a lot as attainable. Authorities are additionally involved that extreme additional tightening of mortgage rules might adversely affect odd residents and the true financial system. A high-ranking official from monetary authorities defined, “It wouldn’t be straightforward to have measures that drastically exceed the June 27 measures,” whereas additionally stating, “Contemplating housing costs, we’re in a state of affairs the place family loans have to be managed with excessive depth.”
