South korea: South Korea's household credit surged to an unprecedented level in the second quarter, marking the fastest growth in nearly five years, driven by a rise in housing and investment-related loan demands, as reported by the central bank data.
According to Yonhap News Agency, the outstanding household credit reached a record 2,019.8 trillion won (US$1.43 trillion) by the end of June, reflecting an increase of 25.9 trillion won from the previous quarter. This on-quarter growth is the largest since the third quarter of 2021, during which the balance rose by 34.8 trillion won.
Household credit includes credit purchases and loans provided to households by financial institutions. "The sharp increase came with a rise in housing transactions in the quarter before the exemption of capital gains tax expired," explained Kim Sung-jun, head of the monetary and financial statistics team at the Bank of Korea. "At the same time, non-mortgage loans increased as well in an apparent move to invest in the booming stock market."
Specifically, household loans were recorded at 1,891.3 trillion won at the end of June, up by 24.9 trillion won from three months earlier, marking the most significant on-quarter increase since Q3 2021. Within this total, mortgage lending increased by 12.2 trillion won to 1,190.8 trillion won, while non-mortgage loans rose by 12.8 trillion won to 700.5 trillion won.
Credit purchases also saw an uptick, climbing by 900 billion won on-quarter to 128.5 trillion won, although this was a slowdown compared to a 1.4 trillion-won increase in the first quarter, as revealed by the latest findings.