The South Korea Financial Services Commission reported that household lending across the financial sector increased by KRW 6.2 trillion in July, slowing from KRW 8.3 trillion in June but exceeding the KRW 2.2 trillion rise a year earlier. Mortgage lending growth eased to KRW 3.5 trillion from KRW 4.5 trillion, while other lending growth declined to KRW 2.7 trillion from KRW 3.8 trillion. Bank lending rose by KRW 5.4 trillion, compared with KRW 7.6 trillion in June, while lending by nonbank financial institutions increased by KRW 0.8 trillion, broadly unchanged from the previous month. At an expanded household debt review meeting, the commission and participating authorities reviewed implementation of the housing market stabilization package announced on Aug. 13. The measures maintain demand controls while supporting housing supply and lending to end users. They include increasing project finance guarantees to KRW 23 trillion in 2026 and KRW 33 trillion in 2027, creating an additional KRW 3 trillion Korea Asset Management Corporation fund for distressed projects, expanding syndicated lending and establishing support centers for project finance sites and construction companies. Financial institutions were asked to adjust household lending targets so relocation, interim-payment and final-payment loans remain available to end users, without signaling broader easing that could stimulate speculative demand. Measures that can be implemented quickly, including expanded project finance guarantees, a 100% guarantee ratio for residential projects and revised loan-to-value calculations for relocation loans, are due to take effect in August 2026. Measures requiring administrative action or legislation will proceed separately.

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