Household loans extended by local banks continued to rise at a fast clip in April, due mostly to an increase in collective loans for housing projects, central bank data showed Thursday.
Outstanding household loans from local lenders came to 654.3 trillion won ($561.25 billion) as of end-April, up 5.3 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).
The on-month increase marked an acceleration from a 4.9 trillion-won gain in the previous month.
"Home-backed household loans increased 4.6 trillion won from the previous month in April due to a rise in demand for collective loans," the BOK said in a press release.
Collective loans are often associated with the reconstruction of old apartments.
Also reflecting a rise in demand for homes, the number of property transactions involving apartment units in Seoul spiked over 21 percent on-month to 8,600 in April, according to the central bank.
However, the rise in household debt, as well as an increase in the rate of the increase, apparently follows a delay in the much-awaited U.S. rate hike, which was feared to cause a rise in interest rates here if it had taken place in April as many had anticipated.
The Korean central bank has kept its own key rate frozen at a record low level of 1.5 percent since June 2015.
Apparently relieved of such fears, local companies also began expanding their borrowing.
In April, outstanding corporate loans from local banks came to 740.8 trillion won, gaining 6.7 trillion won from the previous month and marking a great acceleration from a 0.7 trillion won on-month increase in March. (Yonhap)
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