South Korea’s household credit rose to a fresh record high in the second quarter as housing lending increased ahead of the end to a tax benefit over home purchasing, the central bank said Thursday.

Household credit totaled 980 trillion won ($870.1 billion) as of the end of June, up 16.9 trillion won from three months earlier, according to the Bank of Korea.

Household credit refers to credit purchases and loans for households extended by financial institutions, including commercial lenders and mutual savings banks.

Household debt resumed its growth in the second quarter after falling 700 billion won in the first quarter when card spending declined amid sluggish domestic demand.

The BOK said that lending expanded last quarter as housing transactions increased ahead of an end-June expiry of the government’s tax break over home buying.

In April, the government unveiled a set of measures to boost the slumping property market including tax breaks for first-time homeowners and a cut in the supply of new homes.

Household lending by banks and non-bank institutions rose by 17.5 trillion won on-month to 926.7 trillion won as of the end of June, the BOK said.

Loans by local banks grew 8.3 trillion won to 470.7 trillion won and their mortgage lending gained by 5.6 trillion won last month.

Credit purchases stood at 53.3 trillion won as of end-June, down 600 billion won from three months earlier, it added.

Korea’s household debt has been repeatedly cited as the main drag on Asia’s fourth-largest economy because households’ high indebtedness is feared to curb domestic demand and thus crimp economic growth. (Yonhap News)