Excess cash held by households and non-profit organizations here continued to dwindle in the third quarter due to a rise in demand for homes and a surge in home rental fees, central bank data showed Wednesday.

Excess funds held by local households and non-profit organizations came to 20.2 trillion won ($17.24 billion) as of the end of September, compared with 24.9 trillion won three months earlier, according to the Bank of Korea.

In the second quarter, the amount had slipped 4.7 trillion won from the previous quarter. Excess funds refers to money that remains on the balance sheets of holders after deducting their deposits and financial investments.

"Funds held by households and non-profit organizations shrank from the previous quarter due to an increase in consumer spending and home purchases," the central bank said in a press release.

The number of home transactions spiked 43.2 percent on-year to 110,675 in July, followed by a 23.2 percent surge in August. In the first 11 months of the year, the number jumped 21 percent from the same period last year, the land and transportation ministry said earlier.

Amid a great surge in demand for homes, home rental prices have also skyrocketed.

In many areas of the capital Seoul, the average amount of home rental deposits, called "jeonse" here, has gained over 20 percent in less than two years, while the increase had usually maintained a single-digit figure in the past.

Jeonse is a home rental system unique to South Korea where tenants pay a large sum of money as a deposit instead of paying monthly fees. Landlords profit off of the large deposit before returning the entire amount when the rental contract expires.

As of the end of September, the country's total household debts reached a record high of 1,166.4 trillion won, jumping 10.4 percent from a year earlier.

Unlike households, local companies narrowed their shortage of funds in the third quarter.

As of the end of September, the capital shortage experienced by non-financial firms here came to 4.7 trillion won, down from 5.2 trillion won at the end of June, according to the BOK.

The overseas account also saw its shortage narrow to 29.9 trillion won at the end of September from 32.7 trillion won three months earlier. (Yonhap)