S.Korea's household debt growth hits 16-month high in February

Source: Xinhua | 2020-03-12

South Korea's household debt growth hit the highest in 16 months in February ahead of the implementation of the government measures to curb home purchase with borrowed money, joint data from the financial regulator and the central bank showed Wednesday.

Debts, owed by households to all financial institutions, expanded 9.1 trillion won (7.6 billion U.S. dollars) in February, according to the Financial Services Commission (FSC) and the Bank of Korea (BOK).

It marked the fastest monthly expansion since October 2018, and was far higher than an increase of 3.7 trillion won (3.1 billion U.S. dollars) in January and a growth of 2.5 trillion won (2.1 billion U.S. dollars) in February last year.

Households debts, extended by banks, soared 9.3 trillion won (7.8 billion U.S. dollars) last month, posting the highest monthly gain since relevant data began to be compiled in 2004.

It came as the government's new measures in December to curb the home purchase with borrowed money had yet to take effect. Households rushed to buy home ahead of the implementation of the measures.

Home-backed loan, offered by banks, jumped 7.8 trillion won (6.5 billion U.S. dollars) last month, logging the highest advance in 58 months.

The number of apartment transactions in Seoul stood merely at 6,000 in January, but the figure in the surrounding Gyeonggi province surged to about 21,000 both in January and December last year.

Demand for home purchase with borrowed money remained strong as the BOK slashed its benchmark interest rate to a record low of 1.25 percent in October last year.