August 10, 2023 11:56
Household debt continues to rise despite high interest rates. Household loans from commercial banks increased by W6 trillion last month alone to reach a new record (US$1=W1,316).
The rise in debt is attributed primarily to more people taking out loans to buy apartments before their prices rise again.
According to the Bank of Korea on Wednesday, household loans from commercial banks increased by W6 trillion to reach W1.07 quadrillion last month.
Rising interest rates had caused household debt to decrease since the second half of 2022, but it began creeping up again in April and has continued rising since.
Last month's increase was the largest since July last year, when residential property prices peaked, and the trend is highly likely to continue.
Yoon Ok-ja at the BOK said, "Apartment sales started showing signs of a recovery in June, and that means an increase in fresh loans two or three months later."
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