The Bank of Korea said on the 9th that dwellings-related loans issued by banks in June, including mortgage loan and jeonse (lump-sum lease) funds, totaled 4.3 trillion won. It was the biggest increase in 17 months since January 2025 (5.1 trillion won). As demand for jeonse shifted to purchases in outer areas of the Seoul metropolitan area, housing transactions increased, lifting the volume of home sales.
According to the Bank of Korea's "June financial market trends" released that day, dwellings-related loans began to rise in April. On a cumulative basis for January to March this year, they were -300 billion won. But they grew by 2.7 trillion won in April and 3.2 trillion won in May, with the pace of increase accelerating.
The Bank of Korea said the recent jeonse crunch has pushed jeonse demand toward purchases. As jeonse prices surged, sentiment to buy real estate strengthened. Jeonse funds have declined every month this year. In June they were -700 billion won, a larger drop than in January (-300 billion won). A Bank of Korea official said, "Jeonse transaction itself has decreased," adding, "some jeonse demand has shifted to purchase demand in outer (metropolitan) areas."
The Bank of Korea projected that dwellings-related loans will continue to increase. A Bank of Korea official said, "Real estate prices in key areas of Seoul and Gyeonggi continue to rise at an annual rate of over 10%," adding, "housing transaction volume is also above its long-term average, so loans related to home purchases are under considerable upward pressure."
Meanwhile, other loans such as unsecured credit and overdraft loans came to 3.3 trillion won in June. That was down from May's 3.7 trillion won, which had marked a 61-month record high, but the rising trend has continued. As the Korea Composite Stock Price Index (KOSPI) hit record highs day after day, "bit-too," or borrowing to invest in stocks, increased. A Bank of Korea official said, "Other loans typically decline in June due to the effect of selling off nonperforming loans," adding, "considering that, the overall growth remained high."
Total household loans, combining dwellings-related loans and other loans, were found at 7.6 trillion won. That was the largest increase in 22 months since August 2024 (9.2 trillion won).