PF new lending statistics far removed from reality: “Do they include maturity extensions, too?”

[Financial News] Concerns are being raised that financial authorities’ statistics on new real estate project financing (PF) lending do not accurately reflect reality. That is because the figures include maturity extensions, not just genuinely new lending.
Industry sources and financial authorities said on the 18th that new real estate PF lending totaled 23.5 trillion won in the second quarter of this year, up from 16.8 trillion won in the first quarter. Financial authorities’ statistics show that new PF lending has averaged more than 20 trillion won since the second quarter of last year.
The problem is that the statistics on new real estate PF lending released by financial authorities also include “maturity extensions” of existing PF loans. A financial authority official said, “Even when a loan’s maturity is extended, we treat it as new lending if the lender consortium or other parties involved have changed.”
Industry sources say the figures are far removed from reality. One source said, “Only new bridge loans and similar lending count as new lending. Extensions of existing loans cannot be counted as new lending, regardless of the type of loan.”
The industry has repeatedly asked financial authorities for statistics on “purely new real estate PF lending.” But the statistical system has yet to be improved.
According to industry sources, the new PF market is effectively at a standstill despite a series of measures, including the government’s expansion of public guarantees. Maturity extensions are still being made steadily, albeit with difficulty, but almost no new real estate loans are being issued.
One source said, “With interest rates also rising, new real estate development has come to a complete halt apart from an extremely small number of projects, such as new-build purchase commitments and apartments in prime locations. Even large construction companies are not providing PF credit enhancement these days.” Another source added, “For small- and medium-sized developments, land trusts through real estate trust companies used to be the main option, but that avenue is now completely blocked. The collapse of the development and supply ecosystem is ongoing.”
[email protected] Lee Jong-bae Reporter