No End to Soaring Household Debt

  • By Shon Jin-seok

    February 23, 2022 12:26

    Korea's household debt soared by W134.1 trillion to a record W1.86 quadrillion last year, the Bank of Korea said Tuesday (US$1=W1,193).

    Only a decade ago Korea's household debt stood at W963 trillion, but in 2013 it surpassed W1 quadrillion for the first time. The fastest increase was in 2016 when it grew by W139.4 trillion, but last year marked the second fastest.

    The main culprit was housing loans at W982.4 trillion as real estate prices spiraled out of control. They grew by W72 trillion last year alone, but growth slowed markedly in the fourth quarter amid tough new lending curbs and rising interest rates.

    That is why household debt increased by only W19.1 trillion that quarter, slowing from an increase of W43.5 trillion in the second quarter and W34.9 trillion in the third. Housing loans increased by W13.4 trillion in the fourth quarter, compared to around W20 trillion in the second and third.

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