Jeju Sees Soaring 'Debt-Fueled' Loans Amid Stock Market Boom, While Mortgage Growth Plummets

Other Household Loans Surge by 217.9 Billion Won in First Half

Mortgage Loan Growth Slows to 60.1 Billion Won

Delinquency Rate at 1.1% – The Only Region Nationwide Above 1%

According to a survey on financial institution deposits and loans by the Jeju branch of the Bank of Korea, the rise in mortgage loans has significantly slowed due to the downturn in the real estate market and tighter lending regulations. However, fueled by a ‘debt-fueled investment’ (using borrowed funds to invest) craze in a bullish local stock market, other household loans such as credit loans jumped by 21.79 billion won in the first half of this year alone, driving the overall increase in household lending. At the same time, the delinquency rate on household loans has soared, pushing Jeju's overall loan delinquency rate into the 1% range—the only one among the 17 regions nationwide—triggering a warning signal for asset quality management.

In the Jeju region, while mortgage loans have slowed due to the real estate market downturn, other household loans such as credit loans are rapidly increasing due to demand for stock investment, and the household loan delinquency rate is showing an upward trend. AI-generated image.

According to the “Deposit and Loan Trends at Financial Institutions in the Jeju Region as of June 2026” released by the Bank of Korea’s Jeju branch on the 30th, the balance of household loans at financial institutions in the province stood at 16.0561 trillion won as of the end of June (with mortgage loans at 6.6552 trillion won and other household loans at 9.4010 trillion won), up 2.5% from the same period last year (15.6636 trillion won).

Notably, the total increase in household loans in the province during the first half of this year was 278 billion won, or 3.8 times higher than the increase during the same period last year (73 billion won).

There were stark contrasts by loan type.

Mortgage loans increased by only 60.1 billion won in the first half, a significant reduction in growth compared with the same period last year (325.6 billion won).

This is attributed to a combination of factors: the prolonged slump in the real estate market, the accumulation of unsold housing units, and the increased capital reserve burden on banks due to the higher risk weight applied to mortgage loans (from 15% to 20%), all of which have raised the lending threshold.

In contrast, other household loans—including general credit loans and overdraft accounts—surged by 217.9 billion won in the first half, reversing from a sharp decline of 252.6 billion won in the same period last year.

Other household loans, which had been declining at the beginning of the year, turned to an increase in March (up 13.2 billion won). In April, they grew by 93.8 billion won, and by 140.8 billion won in May, marking the largest monthly increases in about five years since April 2021.

This trend is attributed to a surge in credit loan demand among individuals trying to raise funds for stock investment amid a strong stock market. In June, the increase moderated somewhat to 45.7 billion won.

The problem is that, amid this ‘debt-fueled investment’ craze, the household debt repayment burden has increased significantly.

As of the end of June, the household loan delinquency rate at local deposit banks reached 1.28%, up 0.04 percentage points from the previous month.

When including the delinquency rate on corporate loans (1.05%), the overall delinquency rate for all deposit banks was 1.10%, a modest decrease of 0.01 percentage points from the previous month. However, this figure is nearly twice the national average (0.57%) and was the only rate among the 17 regions nationwide to remain above the 1% level, highlighting the highest level in the country.

This content was produced with the assistance of AI translation services.