South Korean bank household loans rebounded as housing transactions recovered and apartment supply expanded since the start of the year.
According to the "April 2026 Financial Market Trends" released by the Bank of Korea on the 17th, the outstanding balance of household loans at banks stood at 1,174.9 trillion won at the end of last month, up 2.1 trillion won from the previous month. The growth had narrowed to around 500 billion won in March, showing signs of stabilization, but expanded again after just one month.
Mortgage loans drove the increase. Bank mortgage loans rose 2.7 trillion won last month, swinging from flat in the previous month.
The BOK cited a recovery in nationwide apartment transactions since the start of the year and rising demand for interim payments amid expanded apartment offerings as key drivers. The expiration of the heavier capital gains tax deferral for multiple-home owners on the 9th also influenced the increase in transactions, according to the analysis. Properties from multiple-home owners came onto the market before the tax break ended, and mortgage demand grew as buyers absorbed them.
Park Min-cheol, deputy head of the BOK's Market Operations Team, said, "The housing market serves as a leading indicator for household loans," adding, "As properties were absorbed ahead of the end of the heavier capital gains tax deferral, transaction volumes and price gains widened."
Given that loans are typically executed one to two months after a housing sale contract, mortgage growth is likely to continue this month. Nationwide apartment transactions rose from 41,000 units in February to 49,000 units in March.
However, the BOK does not expect the rapid growth in household loans to persist, citing tightening loan management across the financial sector. "Household loans will likely continue limited growth for the time being," Park said, but added, "Given lingering instability in the Seoul metropolitan housing market, whether stabilization becomes a trend remains to be seen."
Other loans, including credit loans and overdraft accounts, swung to a decline. As individual investors used proceeds from net stock sales to repay loans, other loans turned to a 600 billion won decrease last month from a 500 billion won increase the previous month.
Corporate loan growth also accelerated. Bank corporate loans rose 10.7 trillion won last month, expanding from 7.8 trillion won the previous month.
Loans to small and mid-sized enterprises grew 5.7 trillion won, driven by aggressive bank marketing and demand related to value-added tax payments. Loans to large corporations also increased 5 trillion won amid the re-execution of funds temporarily repaid at the end of the previous quarter, dividend payments, and demand for corporate bond redemptions.
The corporate bond market, by contrast, continued net redemptions amid heightened interest rate volatility. As companies shifted to bank loans or commercial paper (CP) instead of corporate bonds, corporate bonds posted 3.9 trillion won in net redemptions last month.
