Since last year, lending to households has also started picking up after falling in a high-interest rate environment in the previous years.It reached 1,424.7 trillion won as of June this year, up 20.7 trillion won from the end of last year and accounting for 49.4% of the country’s entire real estate exposure.After peaking at 55.3% in 2015, the country’s household exposure steadily dropped to 48.2% in 2022.But it ticked up to 49.0% as of the end of 2023, and then rose further to 50.6% in the first quarter and 50.7% in the second quarter this year.
After Korea’s central bank on Friday cut its benchmark interest rate by a quarter percentage point to 3.25%, the country’s real estate exposure could rise further, warned the lawmaker, asking for stricter management of financial risk exposed to the country’s mounting household loans and project finance.
The Bank of Korea also voiced concerns about the country’s financial stability after its first rate cut in more than four years and hinted at gradual and small cuts ahead to slow easy money growth after the country’s household borrowings hit a record high on high mortgage loans in the second quarter of this year.
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