Demand for loans by households and companies in South Korea is expected to remain strong in the fourth quarter of the year, a survey showed Thursday.

The overall index measuring demand for bank loans stood at 23 for the October-December period, jumping from 21 for the previous quarter, according to a survey of 16 local banks conducted by the Bank of Korea.

The increase was largely attributed to an expected rise in demand from small and medium-sized enterprises  amid growing uncertainties here and abroad.

"Demand for loans by SMEs is expected to slightly expand on a need to improve their liquidity amid continued economic uncertainties," the BOK said in a press release.

The index measuring the demand for loans from small and medium-sized companies came to 28 for the fourth quarter, compared with 25 three months earlier.

The central bank slashed its outlook on the country's economic growth estimate to 2.8 percent from 3.1 percent in April.

BOK Gov. Lee Ju-yeol has said yet another revision to the growth outlook may be necessary considering the slow recovery of local spending that took a severe beating from an outbreak of Middle East Respiratory Syndrome, the world's second-largest outside Saudi Arabia.

Apparently reflecting the grim consumer sentiment, the index measuring households' demand for loans came to 6 for the October-December period, down from 9 for the third quarter.

Households' demand for mortgage loans, on the other hand, is expected to remain strong amid an apparent boom in the property market.

In the first eight months of the year, the number of home transactions spiked over 30 percent on-year with home transactions in August alone jumping 23.2 percent to 94,110, a new record high for the month of August, according to earlier data from the Ministry of Land, Infrastructure and Transport. (Yonhap)