Fixed-Rate Share of Korean Mortgages Rises for First Time in 10 Months

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1. "Rates Will Climb Further" — Fixed-Rate Share of Mortgages Turns Higher for First Time in 10 Months

Key summary: According to the weighted average interest rates for financial institutions released by the Bank of Korea, the mortgage rate rose 0.18 percentage point from the previous month to 4.66% in August, a fourth consecutive monthly increase since May. The share of fixed-rate loans among new mortgages rose 3.4 percentage points to 35.3% in August from 31.9% in July, turning higher for the first time in 10 months since November last year. The BOK explained that during a period of rising rates, variable rates climbed more than fixed rates, narrowing the gap between the two types. With the possibility that the BOK will raise its base rate further this year, compounded by upward rate pressure from the United States, the prevailing analysis is that the rise in mortgage rates will continue for some time.

2. One-Year Corporate Deposit Rate Tops 4%

Key summary: The one-year rate on Woori Bank's WON Corporate Time Deposit rose to 4.09%, the first time a major bank's corporate deposit rate has broken through 4%. The rate has climbed 1.12 percentage points this year alone, while corporate time deposits at NH NongHyup Bank (3.81%) and Shinhan Bank (3.73%) also showed steep gains. With rates surging on corporate deposits, which account for about 80% of all deposits in the banking sector, forecasts suggest lending rates will soon follow higher. External variables are adding to upward rate pressure, with the U.S. 30-year Treasury yield reaching its highest level in 24 years since 2002 and domestic five-year financial debentures setting a yearly high of 4.65%.

3. Is the Aggressive Push Working? Seoul Building Permits Up More Than Sevenfold

Key summary: Building permits in Seoul totaled 11,306 units in August, a 604.4% surge from a year earlier, with apartment permits jumping 938.1% to 10,537 units. Cumulative permits from January through August (39,940 units) have already passed 106% of the long-term average (38,000 units), putting the annual long-term average of 63,000 units within reach by year-end. Construction starts also recovered alongside permits, with the January-August cumulative figure of 20,679 units up 41.1% from a year earlier. The Ministry of Land, Infrastructure and Transport assesses that the effects of a policy package including eased building regulations and an expanded program to purchase newly built homes under advance agreements are feeding through to a recovery in leading supply indicators.

4. Gangnam Area Included for First Time With Bangbae, Olympic Park — 11 Candidate Sites Selected for Urban Mixed-Use Projects

Key summary: The Ministry of Land, Infrastructure and Transport has selected 11 sites in Seoul as new candidates for urban mixed-use development projects, pushing for the supply of a combined 18,000 units. For the first time, the list includes sites in the Gangnam area — the eastern side of Isu Station in Bangbae-dong, Seocho-gu (918 units) and the area near Olympic Park in Songpa-gu (935 units). The largest sites are the southern side of Yeomchang Station in Yangcheon-gu (4,222 units) and the northern side of Hyochang Park Station in Yongsan-gu (4,040 units). The ministry plans to hold resident briefings in October, designate the planned districts in the first half of next year and begin construction in the second half of 2030. However, designation as a mixed-use district requires the consent of at least two-thirds of landowners and others holding rights, as well as owners of at least half of the land area, so the actual pace of the projects is expected to hinge on securing resident consent.

5. Samsung Station in About 30 Minutes From Changneung — Goyang-Eunpyeong Line Targeted to Open in 2031

Key summary: Korea Land & Housing Corporation (LH) is moving ahead in earnest with construction of the Goyang-Eunpyeong Line, a 15-kilometer route linking the Goyang Changneung district to Saejeol Station (Line 6) in Seoul's Eunpyeong-gu, with total project costs of about 1.7 trillion won ($1.2 billion). The plan calls for building eight stations and one rolling stock depot, with construction starting in January 2027 and service beginning in December 2031. Once open, the line will allow travel from Goyang Changneung to Suseo and Samsung in about 30 minutes via a transfer to the GTX-A, and to Gyeongbokgung and Jongno in about 30 minutes via a transfer to Line 3 at Hwajeong Station. Analysts say the line will dramatically improve transportation access for the Goyang Changneung district, where a total of 38,000 units are slated for supply.

6. Government to Brief on Metropolitan Housing Supply Twice a Month

Key summary: The government has decided to hold regular briefings on the progress of housing supply, including construction starts in the greater Seoul area, at 11 a.m. on alternate Fridays beginning Oct. 16. The aim is to improve market predictability, based on a judgment that the public finds it hard to feel the effects of policy because it takes years to move from construction start to completion and move-in. Prime Minister Han Seong-sook instructed the land ministry and LH at the third interagency meeting to review rapid housing supply to implement a digital housing supply dashboard as soon as possible. The government had promised 1.35 million new construction starts in the greater Seoul area by 2030 under its Sept. 7 measures last year, and last month also announced additional supply measures for "230,000 units plus" in the capital region.