Key facts
- South Korean household credit is expected to have surpassed 2,000 trillion won in the second quarter.
- This milestone is attributed to increased home-backed loans and stock loans.
- Household credit stood at 1,993 trillion won at the end of March.
- Outstanding household loans by all financial institutions are estimated to have risen by at least 21 trillion won during the second quarter.
- Government measures to cool the housing market and curb household debt have not significantly weakened demand.
Household credit in South Korea is projected to have surpassed the 2,000 trillion won mark for the first time in the second quarter of the year, according to industry sources. This significant increase is primarily driven by a rise in home-backed loans and stock loans, despite ongoing government efforts to cool the housing market and manage household debt.
At the close of the first quarter, household credit had already reached a record high of 1,993 trillion won, marking a 14 trillion won increase from the end of the previous year. This represented the seventh consecutive quarterly rise, although the pace of growth had slowed for two consecutive quarters.
However, estimates suggest that outstanding household loans extended by all financial institutions increased by at least 21 trillion won during the second quarter. This surge is expected to push total household credit beyond the 2,000 trillion won threshold.
Despite the government's implementation of measures aimed at curbing the overheated housing market and household debt, demand for homes has remained robust. Concurrently, stock loans have seen an increase, correlating with a bull run in the stock market.
For the entirety of 2025, household credit saw an increase of 56.1 trillion won, or 2.9 percent, compared to the previous year, marking the fastest growth rate recorded since 2021.