Published : Oct. 4, 2015 - 14:40
(123RF)
Mortgages issued by Korean banks grew at the fastest pace in five years last month due to rising rents and seasonal factors, industry data showed Sunday.
In September, the mortgage loans of the country’s six major banks – KB Kookmin, Shinhan, Woori, KEB-Hana, Nonghyup and Industrial Bank of Korea – stood at 331.9 trillion won, ($280.6 billion), up 3.9 trillion won from a month ago.
The monthly growth marks the sharpest rise since relevant data was compiled in 2010.
Mortgage loans have grown fast over the past year after Seoul began to ease ceilings on household lending and so to spur the property market.
The government eased the loan-to-value and debt-to-income ratios in August 2014, which enabled potential homebuyers to borrow up to 70 percent of their property value and 60 percent of their income for mortgage payments.
September has been an important month to gauge the home loan growth since Koreans who seek housing deals and moving arrangements tend to wait until September for favorable climate.
Experts attributed the speedy growth of house-backed mortgages last month to rising house prices, which are driving customers to buy houses while interest rates are low.
On Sept. 11, the Monetary Policy Board of the Bank of Korea kept the key interest rate at the record-low 1.5 percent for three straight months, aiming at increasing demand.
According to the KB Kookmin Bank’s data, September buying costs of an apartment in Seoul rose to 516.1 million won, up 4.1 million won in a month.
The soaring prices of “jeonse,” a uniquely-Korean home rental system in which tenants pay a lump sum deposit to the landlord and get it back upon moving out, also pushed up demand for mortgages.
According to government data, the average jeonse prices for apartment in Seoul jumped to 357.6 million won in late September, up 6.6 million won from a month earlier.
Real estate analysts expected the mortgage loans to continue growing for the time being, as housing transactions are expected to increase in number and volume despite a lack of housing supply.
“As home prices and transaction volume continue to grow, the amount of mortgage loans is expected to rise as well,” said Im Chae-woo, a property analyst at Kookmin Bank.
By Chung Joo-won and news reports (
joowonc@heraldcorp.com)