S. Korea's mortgage loans continue to grow fast

By Lee Youkyung
SEOUL, Sept. 4 (Yonhap) -- South Korea's mortgage loans continued to rise at a
fast pace in August, the financial watchdog said Friday, stoking concerns the
sharp increase could destabilize the housing market.
Local financial firms extended 4.2 trillion won (US$3.37 billion) in home-backed
loans last month, bringing this year's total to 28.1 trillion won, according to
the Financial Supervisory Service (FSS),
August marked the third consecutive month that the monthly increase in mortgage
loans hovered over 4 trillion won.
Home-backed loans amounted to 4.5 trillion won each in June and July, the annual
low season for housing markets ahead of the expected rise in housing demand in
the fall, which is the most popular moving season in South Korea.
The steady increase in mortgage loans has prompted authorities to keep a wary eye
on housing prices.
"We are closely watching the movement of housing prices," said Kim Jong-chang,
the FSS chairman told reporters Thursday. "We will take additional measures, if
necessary."
In July, the Financial Services Commission, the decision-making body of the FSS,
announced a set of measures to strengthen regulations on home-backed loans in an
effort to keep housing prices from rising further.
The stiffened rules allow local banks to extend mortgage lending up to 50 percent
of the value of a residence in Seoul and its adjacent area, down from 60 percent.
ylee@yna.co.kr
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