News ID: 202050
Published: 0912 GMT October 09, 2017

One in three S. Koreans in debt as they borrowed by to buy houses

One in three S. Koreans in debt as they borrowed by to buy houses

One in three South Koreans have borrowed money to buy houses and they took larger amount of loans than other debtors, becoming one of the main reasons behind the ballooning household debt in Asia's fourth-largest economy, a report showed.

A total of 18.57 million South Koreans, 36 percent of the total population, borrowed 1,439 trillion won (US$1.2 trillion) from local lenders as of June, with each holding 77.47 million won of debt on average, according to Rep. Chung Sye-kyun's office that analyzed credit data by NICE Holdings, Yonhap reported.

A third of the debtors, or 6.22 million people, took out combined 938 trillion won of loans in the form of a mortgages, Chung's office said.

Each mortgage borrowers had 150.74 million won in debt on average, which is about four times the total for of non-mortgage borrowers.

The debt burden was much higher for multiple homeowners although their income level was not far greater than those with just one house, posing a higher risk in terms of their debt service capability, it noted.

The average debt of 1.32 million people with multiple houses was estimated at 220.94 million won, far surpassing the average debt of 131.82 million won by one-house owners.

Chung called for the government to take into consideration debt by multiple home owners when taking tougher real estate measures to help reduce rising financial risk to Asia's fourth-largest economy.

"The government needs to strengthen loan regulations on multiple home owners, while taking cautious measures so as not to make them default or experience difficulties paying back debt due to lack of liquidity," the National Assembly Speaker said.

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