The ratio of the debt repayment burden was higher among households with lower incomes. (image: Korea Bizwire)
SEOUL, Jan. 4 (Korea Bizwire) — Seoul citizens’ debt load has increased by 90 trillion won (US$79.9 billion) over a seven-year period starting in 2010, a municipal think tank said Friday, calling attention to the liabilities of marginal households.
The Seoul Institute, affiliated with the Seoul Metropolitan Government, said in a report that six out of 10 citizens feel burdened by the principal and interest payments for their debts.
The report, which was based on Bank of Korea statistics, said that the volume of Seoul households’ debts to banks and other savings institutions soared to 285 trillion won in 2017 from 195 trillion won in 2010.
Of the entire debt burden, loans to fund housing rose from 125 trillion won to 177 trillion won in the period, meaning they accounted for more than half of the net debt growth, the report noted.
Seoul’s average household assets amounted to 535.76 million won as of 2017, and its average household debt reached 97.64 million won. The figures were far higher than the national averages of 381.64 million won and 70.22 million won, respectively.
Seoul’s ratio of household debt to gross regional domestic product stood at 74.1 percent as of 2016, far above the national average of 55.3 percent, the report showed. It pointed out that the data means Seoul citizens are more vulnerable to interest rate hikes.
The institute polled 1,000 adult citizens between April and May last year and concluded that 63 percent of indebted households feel burdened by their principal and interest payments. Only 11.3 percent said they are not burdened by their liabilities.
The ratio of the debt repayment burden was higher among households with lower incomes, the report said.
“Seoul citizens are generally more responsive to debt payment due to their comparatively bigger asset size, but the liabilities of marginal households will continue to pose problems,” said the report, calling for countermeasures from the metropolitan government.
“The Seoul city government has not announced any comprehensive household debt management measures since 2012. It should pay more attention to the liabilities of marginal households and small business owners.”
(Yonhap)
