Seoul, April 20 (IANS) Household loans extended by five major banks in South Korea rose by 2.5 trillion won ($1.7 billion) this month, industry data showed on Sunday.
Household loans extended by the five commercial banks, including KB Kookmin Bank, Shinhan Bank and Hana Bank, stood at 741.509 trillion won as of Thursday, according to the data from the banks.
The increase comes after the government lifted the land transaction permission system in February in some areas of Seoul’s affluent Gangnam, Seocho and Songpa districts, prompting a surge in home transactions and demand for mortgage loans, reports Yonhap news agency.
The Seoul government redesignated the areas for the permission system in March, citing the need to rein in a recent surge in household debts and home price hikes.
Home-backed loans increased by some 1.52 trillion won so far this month, also partly triggered by an anticipation of interest rate cuts.
“There is generally a greater demand for loans, while some clients seem to be borrowing money for investment as domestic and international stock markets continue to fluctuate,” an industry official said.
Meanwhile, the Seoul city government said recently it will temporarily adopt the “land transaction permission system” in four affluent districts of the capital to help stabilise the real estate market, less than five weeks after it lifted the same regulation in two of those districts.
The government has designated the Gangnam, Seocho, Songpa and Yongsan districts as areas subject to the permission system for six months, from March 24 through Sept. 30, the Ministry of Land, Infrastructure and Transport said in a press release.
The permission system requires government permission for transactions of properties that exceed a certain size in the subjected areas.
Some 400,000 households living in the four districts’ 2,200 apartment complexes will be affected by the system for the six months, the release said.
—IANS
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