Household Debt Soars to New High on Resurgent Housing Loans

  • By Kim Eun-jung

    November 22, 2023 11:14

    Korea's proportion of household debt to GDP has risen to a new record powered by housing loans that jumped W17 trillion in the third quarter of the year alone (US$1=W1,289). 
    Household debt stood at W1.88 quadrillion as of the end of September, according to the Bank of Korea on Tuesday. After peaking at W1.87 quadrillion in the third quarter of 2022, household debt declined for the next two quarters as interest rates soared, but then restrictions on housing loans were eased and debt started to pile up again. 
    The BOK halted rate increases in January and real estate prices began to rise again in some parts of greater Seoul, sparking many fresh housing loans.
    Accounting for around 60 percent of total borrowings, housing loans increased by W17 trillion between July and September to W1.05 quadrillion. They have increased every quarter since 2007, when the BOK began tallying such figures, and doubled over the last decade from W503 trillion in 2013. 
    That brought the proportion of household debt to GDP to 101.5 percent in March, the fourth highest in the word after Switzerland (128 percent), Australia (110.6 percent) and Canada (101.9 percent). The global average is 63 percent.  
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