South Korean banks’ household loans grew at a faster pace in August than the previous month due to marginal gains in home-backed lending and a seasonal factor, the central bank said Wednesday.

Local banks’ household loans, including home-backed and credit loans, amounted to 459.3 trillion won ($407.8 billion) as of the end of August, up 1.5 trillion won from the previous month, according to the Bank of Korea.

The August growth accelerated from a 700 billion won gain tallied in July, when the monthly growth of such lending was the slowest in four months.

A BOK official said the August gain was affected by a seasonal factor, as more people took out loans to cover spending for summer vacations.

The growth of banks’ mortgage lending picked up last month, but overall demand for home-backed lending to buy houses remained subdued amid an anemic property market.

South Korea’s property market is in a slump as the economy is losing steam and more households are delaying buying homes on prospects that housing prices will fall further.

Banks’ mortgage lending grew by 700 billion won on-month to 311.6 trillion won as of end-August, up from a 400 billion won expansion in July, the BOK said.

South Korea is struggling to put a lid on growing household debt as high indebtedness is feared to curb consumer spending, hurting economic growth. South Korea’s household credit stood at 922 trillion won as of the end of June. (Yonhap News)