South Korea's property curbs cool January household loans

The growth was its lowest since November 2017.

The cooling measures applied to South Korea’s heated property market weighed down the growth of household loans in January, reports Yonhap News Agency.

The volume of household loans extended by KB Kookmin, Shinhan, Woori, KEB Hana, and Nonghyup witnessed its smallest pace of growth since March 2017 after rising by $1.06b (KRW1.02t) MoM to $509.4b (KRW571.38t) in January.

Also read: South Korea cracks down on bank lending to cool housing market

The flattish increase in household loans was backed by the slowdown in home-backed mortgages which rose by $2.1b (KRW2.37t) MoM to $362.88b in January. In December, the growth in home-backed mortgages hit $3.56b (KRW4t) MoM.

The subuded growth comes after South Korea laid down measures to rein in the property market by imposing heavier taxes for owners of high-value houses and multiple homes in September 2018.

Home prices and household debt in Korea have surged side-by-side in the past three years as a report from Fitch identified Korea amongst APAC markets whose rising levels of property exposure are raising associated risks of deteriorating asset quality.