South Korea : Q3 household debt rises, mortgage demand rises

SEOUL : South Korea’s household debt grew at a faster pace in the third quarter than it did in the preceding three months, central bank data showed on Thursday, as easy monetary policy continued to boost mortgage demand.

Household debt, including loans and other debt owed by South Korean households, jumped 11.2 percent in the third quarter from a year earlier to 1,295.8 trillion won, accelerating from 11.1 percent expansion in the June-quarter, preliminary data from the Bank of Korea showed.

The sharp growth in household debt comes despite years of government efforts to curb the amount of private sector debt, which threatens to destabilize household finances when and if interest rate rises.

The current base rate is at a record low of 1.25 percent.

Mortgages at depository institutions jumped 13.4 trillion won to 433.6 trillion won in the third quarter from three months earlier, accelerating from a 13 trillion won expansion in the June-quarter.