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Korea’s household credit tops $1 trillion in 2016 on housing boom

Collected: 2017.02.22

Distributed: 2017.02.24

Source: Go Direct

South Korea’s household credit reached record high 1,344.3 trillion won ($1,172 billion) last year through fresh historic annual gain of 141.2 trillion won amid debt-financed housing boom from cheap interest rates.

Household credit, which includes household loans from banks and non-banks as well as outstanding credit card balance, surged 11.7 percent on year to a record high of 1,344.3 trillion won as of December 31, 2016, showed preliminary data released by the Bank of Korea on Tuesday.

The household credit rose by largest-ever 141.2 trillion won from a year-ago period while increasing by 47.7 trillion won from the third quarter, also quarterly high.

The surge in household credit is largely due to booming property market amid low interest environment. The housing market heated up last year as new apartment offerings around southern Seoul fueled speculation by the wealth amid lack of investment options.

By segment, outstanding balance of household loans grew 11.7 percent over the year to 1,271.6 trillion won in 2016.

Loans by non-banking institutions accelerated, up 17.1 percent to 291.3 trillion won from the previous year as result of toughened bank loan regulation.

Loans from commercial banks reached 617.4 trillion won, up by 53.7 trillion won from the previous year.

By Boo Jang-won

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