Loans to S.Korean real estate developers post biggest growth in Q2

Source: Xinhua| 2017-08-24 14:59:41|Editor: Xiang Bo
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SEOUL, Aug. 24 (Xinhua) -- Debts owed by South Korean real estate developers to financial institutions posted the biggest quarterly growth in the second quarter of this year, indicating the booming investment into the property market, central bank data showed Thursday.

Loans extended by deposit-taking institutions to industrial companies came in at 1,016 trillion won (0.9 trillion U.S. dollars) as of end-June, up 14.3 trillion won from three months earlier, according to the Bank of Korea (BOK).

The industrial lending refers to money borrowed by industrial companies, public institutions such as hospitals, and the government from financial institutions.

Among the total, the lending to real estate developers jumped 6.8 trillion won, or 3.9 percent, from three months earlier to 182.9 trillion won as of end-June.

It was the biggest quarterly increase since the bank began compiling the data in 2008.

Funds flowed into the real estate market in the second quarter on expectations for the launch of a new government.

President Moon Jae-in took office on May 10 after winning a landslide victory in the country's first-ever presidential by-election, caused by the impeachment of his predecessor.

The new government unveiled a set of measures to control speculative investment into the real estate market.

The BOK also indicated an interest rate hike in the foreseeable future as the U.S. policy rate neared the BOK's benchmark rate of 1.25 percent.

Lending to the services industry expanded 11.8 trillion won in the second quarter, up from an increase of 8.2 trillion won in the previous quarter.

Loans to manufacturers rose 1.2 trillion won in the quarter, down from an expansion of 6.2 trillion won in the prior quarter. (1 South Korean won = 0.00089 U.S. dollar)