[Start Economy] Household debt exceeds 1,900 trillion on rising house prices

■ Host: Anchor Lee Jung-seop, Anchor Cho Ye-jin
■ Starring: Professor Seok Byung-hoon, Department of Economics at Ewha Womans University

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN News START] when quoting.

[Anchor]
We deliver the economic news quickly and kindly. Start Economy, today we will be joined by Seok Byung-hoon, professor of economics at Ewha Womans University. When I counted how much household debt in the third quarter of this year, it was found to have exceeded 1,900 trillion won. This is the biggest one ever?

[Seok Byung Hoon]
That's right. The Bank of Korea has announced its third quarter household credit. Household credit represents comprehensive household debt and debt. This is the sum of household loans from financial companies such as banks and credit card sales. But it turns out that this household debt is more than 1913 trillion won. Household debt in the third quarter increased by 18 trillion won compared to the end of the previous quarter, the highest since related statistics were published in the fourth quarter of 2002. The increase is also the largest increase in three years since the 35 trillion won in the third quarter of 2021. What happened in 2021 was a period when housing prices were soaring. It is considered worrisome that the increase has been large again since then.

[Anchor]
The increase in growth this time was probably largely due to the increase in housing-related loans, right?

[Seok Byung Hoon]
The biggest reason is the surge in mortgage loans. -The total household debt increased by 18 trillion won in the third quarter. This is because mortgage loans increased by 19.4 trillion won. In the case of mortgage loans, mortgage loans handled by deposit banks increased by 22.2 trillion won, the largest quarterly increase since statistics were compiled. It's currently the largest increase in history. The main reason is that as housing transactions in the metropolitan area and Seoul increase, they use mortgage loans to purchase houses accordingly. The increase in mortgage loans has increased. -In the third quarter, from July to September, there is a second stage of stress DSR regulation that financial authorities originally decided to restrict loan regulations. DSR regulation limits the amount of loans based on one's annual income. In addition, in the case of variable-rate loans, the second stage of stress DSR regulation, which further lowers the loan limit in consideration of the risk of rising interest rates, was originally said to be introduced from July, but it was suddenly postponed to September a week before it was introduced. So, before the second phase of the stress DSR began in September, mortgage lending seemed to have tended to skyrocket at the end of the day due to zero demand for loans. In particular, in August alone, the household debt of the five major banks in the market increased by a whopping 9.6 trillion won, which is also the highest since statistics were compiled from January 2016.

[Anchor]
As you mentioned earlier, should it be considered that the change in timing or the policy trend is out of order has affected the surge in mortgage loans?

[Seok Byung Hoon]
That's right. The back-and-forth policy moves, and then the inconsistent policy moves, have caused a surge in household loans and inconvenience to financial consumers. Most importantly, the second phase of stress DSR regulation will be suddenly postponed from July to September, which will lead to a sharp increase in household loans due to last-minute demand for loans. Again, the head of the Financial Supervisory Service convened the vice presidents of commercial banks and conducted on-site inspections, instructing banks to regulate loans on their own.
So banks raised their lending rates by raising virtual interest rates on mortgages and eliminating preferential interest rates, and then they completely blocked loans to homeowners. As a result of this response, end-users who wanted to buy a house, those people, or financial consumers in need of emergency, were forced to suffer. However, regardless of this, there are still as many loans that apply exceptions to DSR regulations as 70% of new loans. Representative of them are policy loans that lend housing purchase funds or lease funds for ordinary people, such as stepping stone loans and support loans. In the case of this loan, no matter how much DSR regulations are strengthened, the growth rate has not been dampened because it is subject to exceptions. Therefore, according to the Financial Services Commission's announcement in October, the banking sector's policy loans alone increased by 6 trillion won in the third quarter, little change from before. So, about 30% of the mortgage loans increased in the third quarter were policy loans, so even if policy loans were supplied and loan regulations were tightened, they did not apply to them, while other loans were tightened, causing confusion among financial consumers. So, above all, household debt is expected to surge early next year, but to prevent this, we regulate the distribution of new loan supplies evenly by bank on a monthly basis. Then, it is inevitable to expand the DSR regulation to jeonse loans and policy loans.

[Anchor]
In particular, the rise in housing prices was concentrated in Seoul this year. If so, especially in the Gangnam area, as housing prices have risen, the holding tax to be paid next year will also increase, right?

[Seok Byung Hoon]
That's right. In the case of the declared value of real estate next year, the government says it is a realization rate of the declared value that reflects the market price. the ratio of the quoted price to the market price. We froze this on the same basis as 69% of apartments this year. Originally, the holding tax burden, such as property tax and comprehensive real estate tax, was determined only according to the increase in housing prices. However, as the anchor pointed out earlier, real estate prices have risen significantly this year, especially in Seoul and the metropolitan area. As a result, the burden of real estate ownership tax reflecting this market price is also expected to increase. It's called Gangnam 3 districts, Mapo, Yongsan, and Seongdong-gu. Shinhan Bank's estimation results have been announced that the holding tax could increase to around 20% this year. For example, next year's holding tax for a single homeowner with 84.9㎡ dedicated to Raemian Firstage in Seocho-gu, Seoul, is expected to increase by 39% from this year to 13.31 million won. Mapo Raemian Prugio, it's an apartment in Mapo-gu. The holding tax for a single homeowner with an exclusive 84㎡ is expected to be 2.75 million won next year, up 15% from this year. On the other hand, housing prices have fallen in non-metropolitan areas and areas outside the metropolitan area this year. However, in the case of homeowners who own mid- to low-priced apartments here, the holding tax burden is expected to be lowered next year.

[Anchor]
It was also possible to check the polarization of real estate according to region through holding tax. Let me talk about something else. You know the so-called 'working mom' who works while raising children. It is said to be a super mom, and this ratio has reached an all-time high.

[Seok Byung Hoon]
That's right. According to the 2024 employment status of married women released by the National Statistical Office, as of April this year, married women aged 15 to 54 are employed and working mothers living with children under the age of 18. It was counted as 2.668 million people. -The employment rate of married women living with children under the age of 18 was 62.4%, the highest since 2016 when related statistics began to be compiled. In particular, women with fewer children and older children showed higher employment rates. The employment rate was 63.4% for one child
and the higher the number of children, the greater the burden of childcare, so the employment rate gradually decreased from 62.0% to 57.6%. The higher the child's age, the higher the employment rate for women. In the case of children aged 13 to 17, the employment rate was 69.2%, but the lower the age, the more burdensome it is, for example, 64.3% for those aged 7 to 12, and 6 and under. Because it was difficult, it gradually decreased to 55.6%.

[Anchor]
The number of working mothers is increasing like this, and the number of career-interrupted women, so-called hard-working women, is decreasing, can I look at it like this?

[Seok Byung Hoon]
That's right. Among married women between the ages of 15 and 54, the proportion of career-bearing women who quit their jobs was 15.9%, down 1.1 percentage points from last year, a new all-time low. Fewer working mothers have their careers cut off because of childcare. However, the number of career women who have quit their jobs is still quite high at 1.125 million. And if you look at the reason why my career was cut off, the biggest reason was childcare as well. These days, I've been working hard to raise and live as a single dad, and it's quite a burden and I think I should really take a break. However, in terms of the reason for the cut-off, parenting was the highest at 41.1%, so it was completely sympathetic, followed by marriage at 24.9% and pregnancy at 24.4%. According to an official from the National Statistical Office, "The childcare leave and care system have improved gradually in recent years, including the flexible work system. And the social perception that women should continue to engage in economic activities has also improved. It is believed that this has had the effect of reducing career breaks and then increasing the employment rate of working mothers who are raising children. However, the average working hours per week of working mothers were 35.3 hours, down 0.4 hours from the previous year, as the quality of employment itself may not have improved. This means that there are more short-term workers.

[Anchor]
It seems that we also need to take care of quality. We even listened to the thoughts of the twin father. We will also look at the company-related news, and Lotte Group's stock price has fallen a lot due to the spread of rumors of a crisis centered on online. It's not true. It's evolved, right?

[Seok Byung Hoon]
That's right. Since last weekend, Lotte Group's liquidity crisis has led to a YouTube broadcast that it can be decomposed in the air like Daewoo, followed by Girasi. That resulted in a sharp drop in the stock price of Lotte affiliates. So Lotte Group issued an explanatory disclosure saying it was groundless. In fact, several indicators were found to be untrue in the content of Girasi. So the stock price has moved away from the weakness and things are showing signs of calming down. However, the problem is that Lotte Group's stock price, the sixth-largest in the business world, has been reeling because of the rumor. Next, above all, Lotte Group has not been able to find a breakthrough in this due to its prolonged poor performance. So Lotte Group is actually continuously underperforming in chemistry and distribution. In the case of distribution, online shopping is being converted. It was late to switch the system to that side, than the competition group. In the case of chemicals, Lotte Chemical has failed to properly change its business structure, which is highly dependent on the basic chemical sector, with its cumulative operating deficit reaching 660 billion won by the third quarter of this year. So, in order to overcome this deterioration in performance, there is a high possibility of personnel reform at the end of the year regular personnel appointments. So I think it is necessary to restore competitiveness in a short time.

[Anchor]
I see. I'll look forward to it. Let's move on to the next topic. Bitcoin is now riding high after President Trump was elected as the next president of the United States. Please point out how much it has risen and how long do you expect this rise to last?

[Seok Byung Hoon]
It's a very difficult question. Bitcoin was traded below $70,000 on the 5th, the day of the U.S. presidential election. But it reached $93,725 and went up to close to $94,000. It's an all-time high. It has soared 35% since the presidential election. However, in the meantime, bitcoin has been considered as a risky asset, and when geopolitical uncertainty or such increases, bitcoin prices have tended to plunge. However, despite growing geopolitical uncertainty as the possibility of an escalation of the Russia-Ukraine war has been raised this time, Bitcoin has continued to soar. So I said that this is digital gold because the supply of bitcoin is limited. Now, this optimistic outlook is spreading as to whether safe assets such as gold are treated as they are fully settled in the institutional sphere. In the case of Bitcoin, even after U.S. President-elect Donald Trump took office, he vowed to continue to encourage holding virtual currency and pursue a pro-virtual currency policy to develop virtual currency technology. Since many people who wanted to regulate virtual currency have also declared that they will switch to pro-virtual currency personnel, they believe it is likely to continue to rise until President-elect Trump takes office.
But whether policies are carried out consistently as promised after the president-elect takes office is a separate matter. So, if the policy does not come out properly as promised, it can be greatly adjusted, so you should keep in mind that it is still a highly volatile asset and pay attention to your investment.

[Anchor]
It's a part of the policy that needs to be supported, so we'll have to wait and see. Lastly, please point out the New York Stock Exchange. It's a mixed bag.

[Seok Byung Hoon]
As the New York Stock Exchange said earlier, it had originally fallen due to rising tensions that the Russia-Ukraine war could escalate. Technology stocks rose at the end, ending mixed. In the beginning of the market, Ukraine attacked mainland Russia with long-range missiles supported by the United States. So in response to this, Russian President Vladimir Putin signed a new nuclear doctrine amendment to expand the possibility of nuclear attack. That's why Ukraine and the mainland of the United States have been changed to enable nuclear retaliation attacks at the same time. As this nuclear threat risk emerged, it fell one after another in the early market. At the end of the day, Nvidia's earnings report is scheduled, but it rose due to expectations of performance and technology stocks rebounded, leading to the Nasdaq and S&P 500 turning upward, resulting in only the Dow Jones Indices falling 0.28% and the rest going up. Next, Nvidia is soaring as much as 4.89% on the expectation of its earnings release. Tesla also jumped more than 2% on the good news because it said it was relaxing self-driving regulations.

[Anchor]
I see. Let's stop here. I was with Professor Seok Byung-hoon. Thank you very much.