The rise in collateral mortgages slowed in the month following a government clampdown on increasing housing prices, the latest data indicated on Oct.16, 2018, although market watchers say it is premature to say the trend will continue.
Lending records by leading commercial banks put the total collateral mortgages at 396.11 trillion won (US$349.61 billion) as of Friday(Oct. 12, 2018), up 2.85 trillion won on Sept. 13. The increase from Aug. 13 to Sept. 13 was 3.83 trillion won.
According to market watchers, the slowdown is a positive note since the other type of mortgage, group loans, was still increasing. A common practice employed locally in purchasing newly built homes, buyers take out mortgage loans in groups to fund their payments. Such loans rose 1.46 trillion won from Sept. 13 to Oct.12, compared with 1.14 trillion won the preceding one-month period.
The government had announced toughened measures on Sept. 13 to pull the reins on real estate speculation, tightening the availability of loans for homebuyers who were purchasing properties as investments. Measures also included raising taxes for owners of expensive houses or multiple homes.
Much of the group loans are from before the Sept. 13 measures, and the divergent trend in the two types of mortgages indicates that individual collateral mortgages have slowed down, watchers say.
The more cautious watchers say the recent decrease is a result of borrowers who, anticipating government action, took out loans just before Sept. 13. The 3.83 trillion-won increase in collateral mortgages for the Aug. 13-Sept. 13 period is nearly twice the gain of 1.69 trillion won between July 13 and Aug. 13.
Others cite the Chuseok holiday in late September as at least part of the reason for the slowdown in loans.
"Not much time has passed since the Sept. 13 measures, but it is true that the number of new loan applications has fallen," a commercial bank official said. "There appears to be an influence since the new regulations are rather strict." (Yonhap)