In the past month, more than 7 trillion won in housing collateral loans were newly executed at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup Bank). The increase rate of new handling amount compared to the previous month exceeded 30%, marking the steepest rate of increase in the past 10 months. Within the financial sector, there are concerns that a larger demand for housing collateral loans may emerge in the first half of the year, leading to a surge in household loans.
According to the financial sector on the 9th, the new handling amount of housing collateral loans at the five major banks in February was recorded at 7.4878 trillion won. This represents a 34.4% increase compared to the previous month's new handling amount (5.5765 trillion won). When comparing only the increase rate from the previous month, it is the steepest figure in the past 10 months since April of last year (34.8%).
Although the scale of new housing collateral loans increased in February, the proportion of policy loans, such as low-interest loans, decreased. The proportion of policy loans among new housing collateral loans shrank from 44.0% in January to 36.6% in February.
The increase in the new handling amount of housing collateral loans last month is interpreted as a phenomenon resulting from the increased demand for dwellings. Typically, February is one of the peak moving seasons due to preparations for the new school year. As moving demand has a direct impact on housing transactions, related loans also increase accordingly.
A financial authorities official noted, "Historically, the loan demand is relatively low in January, and in February, the moving season drives up the loans, which are usually less in March compared to February."
However, concerns are continuously raised that demand for household loans may surge in the first half of this year. This is partly due to the recent lifting of land transaction permission areas in Seoul and the impending implementation of the third-stage stress total debt service ratio (DSR) regulation in July.
After the lifting of the land transaction permission area in Seoul, the rise in apartment sale prices is intensifying, leading to expectations for an increase in housing transactions and price hikes in Seoul. Additionally, the desire from consumers to secure loans before the lending limit drops under the third-stage stress DSR system may contribute to the increase in household loans.