Household debt continued to rise, exceeding 1,800 trillion won for the first time. This is the result of a surge in house prices and jeonse prices in the aftermath of the real estate situation, as well as an increase in debt for individual investors to invest in stocks.
According to the ‘Household Credit for the Second Quarter of 2021 (Provisional)’ released by the Bank of Korea on the 24th, household credit stood at 1805.9 trillion won at the end of June. Household credit is the sum of household loans from financial companies and sales credit, such as installment payments on credit cards, and is usually used as an indicator of household debt.
At the end of June, household debt increased by 41.2 trillion won (2.3%) from the end of March. The increase was larger than the 36.7 trillion won increase in the first quarter. Compared to a year ago, it increased by 168.6 trillion won (an increase of 10.3%). Compared to last year’s real gross domestic product (GDP) of 1836,881.1 billion won, it is 98.3%. Considering that the population is about 51.82 million, it means that each citizen owes a debt of 34.9 million won.
Among household loans, mortgage loans amounted to 948.3 trillion won, up 17.3 trillion won (1.9%) from the end of March. Other loans, including credit loans, rose 21.3 trillion won (2.9%) to 757 trillion won. Not only did it increase significantly from the previous quarter (14.3 trillion won), but it is also the highest in history based on the increase in the second quarter. The sharp increase in credit loans is the result of a sharp increase in the amount of subscription funds for public offering stocks. The general subscription of SK IE Technology (SKIET) public offering stocks made on April 28-29 attracted an all-time high of 80.9 trillion won.
Song Jae-chang, head of the Bank of Korea’s financial statistics team, said, “The demand for financing for housing jeonse transactions continued and the demand for funds for public offering shares overlapped. did.
By generation, in particular, those in their 20s and 30s have increased their debt a lot recently. At the end of the first quarter of this year, the balance of loans to financial companies in the 2030s stood at 446.5 trillion won, an increase of 55.38 trillion won (14.1%) from the end of the first quarter of last year. The debt growth rate in 2030 will greatly exceed the household debt growth rate (9.5-10.3%) in the first and second quarters of this year. As interest rates on new loans have risen sharply over the past year, household credit risk is also increasing. The average interest rate on household loans (new handling amount) at deposit banks rose 0.32 percentage points to 2.91% in the second quarter of this year from an all-time low of 2.59% in the third quarter of 2020.
There are also warnings that soaring household debt could gnaw economic growth. The Bank of Korea evaluated in the ‘Monetary and Credit Policy Report for June 2021’ released in June that, “If household debt exceeds the appropriate level, the burden of repaying debt increases, which can tighten household spending.”
By Kim Ik-hwan, staff reporter lovepen@hankyung.com
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