Despite banks’ move to tighten household lending, home-backed loans fell a mere 5 percent on-month in September from a record high level a month earlier, data showed Sunday.The daily average amount of new mortgages extended by five major lenders came to 301.8 billion won ($230.03 million) in Sept. 1-26, down 16 percent from the daily average logged in August, according to data from the banks.Excluding the three-day Chuseok holiday this month, however, the September figure stopped short of falling 5 percent compared with a record high of 359.6 billion won logged in August.Banks’ household loans rose for the fifth consecutive month in August, led by a record increase in mortgages, on rising home prices in Seoul and the surrounding areas, according to central bank data.
The financial authorities, in response, called on banks to tighten their lending, and banks have raised interest rates and toughened lending rules.”But it would take some time for such new measures to have effects, as home transactions grew markedly this summer and loans for them are supposed to be actually extended for the following months,” a bank official said.New home-backed loans came to 11.15 trillion won in August, and those for 추천 Sept. 1-26 came to 7.85 trillion won.Banks’ total household loans stood at 729.49 trillion won as of Sept. 26, up from 725.36 trillion won at the end of-August.The Bank of Korea (BOK) has cited rising household debts as a major factor for its rate decision.Last month, the central bank held its key interest rate steady at 3.5 percent, which was the highest level in about 16 years, and some expect a pivot by the BOK as early as October on easing inflation and weak domestic demand.But BOK Gov. Rhee Chang-yong said it needs to consider housing prices and household debts as crucial factors for a possible rate cut.The BOK is scheduled to hold a rate-setting meeting Oct. 11.
