South Korea’s household credit rose to a fresh record high in the third quarter, but its growth slowed from three months earlier on an expiry of tax benefits from home purchases, the central bank said Thursday.

Household credit totaled 991.7 trillion won ($934.5 billion) as of end-September, up 12.1 trillion won from three months earlier, according to the Bank of Korea.

Household credit refers to credit purchases and loans for households that have been extended by financial institutions, including commercial lenders and mutual savings banks.

Household debt rose for the second straight quarter in the third quarter after falling 700 billion won in the first quarter when card spending declined amid sluggish domestic demand.

The BOK said that household credit hit a record high last quarter, but its growth slowed mainly because local banks’ home lending sharply eased due to the end of the government’s tax breaks over home buying and a one-off factor.

In April, the government unveiled a set of measures to boost the slumping property market, including tax breaks for first-time homeowners and a cut in the supply of new homes. A temporary tax benefit came to an end in June.

Local banks’ home lending grew 2.1 trillion won on-quarter to 472.7 trillion won in the third quarter, compared with an 8.3 trillion won on-month gain in the second quarter.

Credit purchases stood at 53.8 trillion won as of end-September, up 500 billion won from three months earlier, it added.

Korea’s household debt has been repeatedly cited as the main drag on Asia’s fourth-largest economy as households’ high indebtedness is feared to curb domestic demand and thus crimp economic growth. (Yonhap News)