“There was also the Chuseok holiday” … Housing loans increased by 6.2 trillion won last month.

Bank of Korea, September Financial Market Trends Released
Banking Sector Household Loans Increase by 5.7 Trillion Won from Previous Month… Credit Loans Show Decrease
Despite Government Loan Regulations and Holiday Effects, Household Loan Growth Slows ‘Hmm’
Bank of Korea “Effects of Policies Visible… Temporary and Seasonal Factors also a Consideration”, ‘[Edaily Jang Young-eun Reporter] Household loans from the previous month increased by 5.7 trillion won last month. Home mortgage loans increased by 6.2 trillion won, while other loans reversed their growth. ‘,
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, ‘Compared to the previous month where household loans and home mortgage loans increased by 9.2 trillion won and 8.2 trillion won respectively, the growth has significantly slowed down, but still remains at a high level considering the loan regulations by the financial authorities and reduced business days for banks due to the Chuseok holiday. ‘,
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(Photo= Yonhap News)

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, Growth in Home Mortgage Loans Slows Compared to August… “Temporary and Seasonal Factors Affecting”,
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, ‘According to the ‘September 2024 Financial Market Trends’ released by the Bank of Korea on the 11th, household loans in the banking sector increased by 5.7 trillion won compared to the previous month. Home mortgage loans increased by 6.2 trillion won, while other loans decreased by 500 billion won. ‘,
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, ‘Although the growth in home mortgage loans has significantly slowed down compared to the record high of 9.2 trillion won in August, it still remains in the 6 trillion won range. Among home mortgage loans, rental deposit loans increased by 600 billion won. ‘,
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, ‘The Bank of Korea explained, “The growth in home mortgage loans has significantly reduced due to the impact of the government’s macroprudential policy strengthening, banking sector efforts to manage household loans, and temporary and seasonal factors.” While August saw a significant increase in home mortgage loans as last-minute demand surged ahead of loan regulations, September was influenced by a reduction in business days due to the Chuseok holiday, holiday effects, and the full implementation of loan regulations. ‘,
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(Source= Bank of Korea)

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, ‘The nationwide apartment transaction volume has also slightly decreased recently with a lag of 2-3 months following the trend of home mortgage loans. However, it still remains at a high level compared to when the increase trend started back in May. ‘,
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, ‘According to the Ministry of Land, Infrastructure and Transport, the nationwide apartment transaction volume, which was around 30,000 to 31,000 units in the first two months of this year, continued to increase to 40,000 units in March, 38,000 units in April, 39,000 units in May, 43,000 units in June, and 48,000 units in July, before decreasing to 42,000 units in August compared to the previous month. ‘,
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, ‘During the announcement of the ‘August Financial Market Trends’ last month, Park Min-cheol, Head of the Market Oversight Team at the Bank of Korea, stated, “The slowdown in household loan growth in September is not expected to continue trend-wise, and there is a high level of uncertainty from October onwards. We need to see the effects of government measures.” ‘,
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, ‘Other loans, including credit loans, returned to a decreasing trend within a month. This is because they temporarily increased the previous month due to summer vacation period and fund demand related to stock investments, which then resolved. Factors contributing to the decrease in other loans include inflow of Chuseok bonuses and write-offs of bad debts at the end of the quarter. ‘,
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, Decrease in Corporate Loans… Increase in Banking Sector Deposits Continues,
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, ‘Corporate loans in September increased by 4.3 trillion won, showing a significant decrease in growth compared to the previous month (7.2 trillion won). The reduction of SME loans from 5.3 trillion won in the previous month to 3.5 trillion won in September had a significant impact. The slowdown in growth is attributed to factors such as Chuseok funds and facility funds demand, as well as write-offs of bad debts. The increase in large corporate loans also decreased from 1.9 trillion won in a month to 800 billion won. Some companies saw a slight increase due to temporary repayments for financial ratio management at the end of the quarter. ‘,
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, ‘Corporate bonds continued to mature, leading to net redemption. The net redemption size last month was recorded at 1.3 trillion won. Corporate commercial paper (CP) and short-term bonds converted to net issuance of 1.1 trillion won due to some companies’ working capital demand. ‘,
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, ‘Bank deposits increased by 18.9 trillion won as both time deposits and demand deposits grew. Demand deposits increased by 11 trillion won. Following the inflow of corporate funds for financial ratio management at the end of the quarter, it increased significantly compared to the previous month (13.6 trillion won). Time deposits increased by 6.3 trillion won. Despite the expansion of maturity due, efforts by banks to attract deposits have led to a continued growth trend. ‘,
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, ‘Asset management firm deposits decreased significantly, especially centered around money market funds (MMFs). MMFs decreased by 19.3 trillion won due to government fund collection for national bond principal repayment, outflow of corporate funds for financial ratio management at the end of the quarter, etc. Equity funds (1.2 trillion won) and other funds (3.5 trillion won) continued to attract funds, but bond funds saw a decrease with 300 billion won flowing out, signaling a reversal in growth.’,
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