South Korea’s banks are tightening lending rules in the last quarter of the year, especially for home loans, as authorities work to cool an overheated housing market. A Bank of Korea survey released on Monday shows the shift.
The survey, which included 203 banks and savings institutions, found the overall lending attitude index for October‑December at –14. A negative number means banks plan to tighten instead of loosen credit. In comparison, the index was +7 in Q1, –13 in Q2 and –28 in Q3.
When you break it down by type of loan, the mortgage index was –28, while loans to big companies were at +6. “We expect banks to be a bit more relaxed with corporate borrowing,” said a Bank of Korea official, but they will tighten standards for households to line up with the government’s real‑estate plans.
The government has rolled out new measures to slow the housing market. It recently added 21 more districts in Seoul to a list of “speculative zones,” putting all 25 capital districts under stricter rules. Loan limits for mortgages were cut sharply, from 600 million won ($419,000) in June to just 200 million won ($139,665).
Beyond housing, the data shows South Korean investors are moving more money overseas. In Q3, holdings of foreign securities jumped almost 60 % from last year. Investors owned $220 billion in overseas stocks and bonds by the end of September, up 59.7 % year‑on‑year. U.S. assets dominate: $177.6 billion in U.S. stocks and bonds, or 80.7 % of all foreign holdings. U.S. equities alone were $155.5 billion, 94 % of the stock portion.
Tesla stands out as the top pick, with South Korean investors holding $27.5 billion in the electric‑vehicle maker. Tesla held the top spot for three straight quarters.
These moves—tightening home loan rules and shifting investment focus—highlight the government’s effort to balance a booming real‑estate market with broader economic stability.
Source: ianslive
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