This photo taken Mar.2 shows apartment buildings in Seoul's Songpa. (Yonhap)
This photo taken Mar.2 shows apartment buildings in Seoul's Songpa. (Yonhap)

The financial regulator said Monday that household loan growth is still manageable, although its growth spiked last month amid the spring moving season and a rise in home prices in some areas of Seoul.

Last month, household loans extended by all financial institutions rose 4.3 trillion won from a month earlier to reach 1,667 trillion won, shifting from an on-month dip the previous month.

In particular, household loans extended by banks rose for the first time in three months in February.

"Household loan growth accelerated in February, but it is still within manageable levels," the Financial Services Commission said.

But recently there are signs of home prices gaining traction on the back of monetary easing, banks' relaxation of some of their lending rules and the government's lifting of part of the land transaction permission zones in Seoul.

Last week, the Bank of Korea warned that such conditions could raise expectations of further increases in housing prices and lead to a rise in household debts,

Industry data showed that housing prices in three districts in southern Seoul where restrictions have been removed rose 0.2 percent in the second week of March, marking the sharpest weekly growth since August.

The financial regulator stressed that it will remain vigilant against a rise in home prices and the subsequent increase in household loans, adding it will take preemptive measures to rein in a further rise in household loans.

The FSC said earlier that tighter debt-service-ratio rules will come into effect in September as planned, with details to be finalized by May.

The FSC introduced the so-called stress DSR ratio, which measures how much a borrower has to pay for principal and interest in proportion to his or her yearly income, serving as a ceiling on aggregate lending. (Yonhap)