15% of Seoul Housing Purchases Are Funded by 'Credit Loans'

Average Credit Loan Amount of 104.89 Million KRW from March Last Year to July This Year
Credit Loans Rise as Mortgage Loans Decline...15% of Seoul Home Purchases Use Credit Loans

Apartment buildings in downtown Seoul. (Photo by Yonhap News)

[Asia Economy Reporter Ryu Tae-min] It has been analyzed that 15% of people who purchased houses in Seoul used credit loans for financing. Their average credit loan amount was found to exceed 100 million KRW.

According to the detailed analysis of the 'Financing Plan' data submitted by the Ministry of Land, Infrastructure and Transport to Cheon Jun-ho, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, among 193,974 housing purchase financing plans submitted in Seoul from March last year to July this year, 29,978 plans (15.5%) included credit loans.

The government has required the input of credit loans in the financing plans submitted at the time of housing purchase contracts since March last year.

During this period, the average credit loan amount in the housing purchase financing plans was 104.89 million KRW. Among them, 11,965 cases (39.9%) involved loans of 100 million KRW or more, 10,355 cases (34.5%) involved loans between 50 million KRW and less than 100 million KRW, and 7,658 cases (25.5%) involved loans less than 50 million KRW.

The use of credit loans for housing purchases appears to be a balloon effect resulting from the government's suppression of mortgage loans as part of market stabilization measures. The credit loan usage rate, which was 10.1% in March last year, steadily rose to 21.9% in August. However, after the Financial Supervisory Service announced strengthened supervision measures against real estate loan evasion circumventing loan regulations in August last year, the credit loan usage rate turned downward, recording 19.3% in September, 16.7% in October, and 13.1% in November of the same year.

Meanwhile, on a nationwide basis, among 922,360 financing plans, 118,891 cases (12.9%) utilized credit loans. The average credit loan amount was 79.43 million KRW.

Assemblyman Cheon Jun-ho said, "Excessive speculative borrowing and all-in borrowing can be a significant burden on households during periods of interest rate hikes," adding, "Measures to manage household debt must be steadily implemented to prevent loans exceeding borrowers' repayment capacity."

This content was produced with the assistance of AI translation services.