S Korea's surging household debt threatens its economy
Drive out along Seoul's riverside highway and you pass mile after mile of concrete apartment blocks - blank beige towers built to house the capital's burgeoning population, the block numbers painted in giant letters on their outside walls.
Owning a piece of this concrete landscape has become increasingly important to Koreans, and the banks that fund them.
After the Asian financial crisis in the late 1990s, banks turned their attention away from company loans towards private credit. Families were their new target customers.
Since then, household debt in South Korea has grown by an average of 13% a year, almost twice as fast as the country's gross domestic product (GDP).
It has now reached more than 800 trillion won ($750bn; £469bn), equivalent to 150% of disposable income.
The surge in household debt has the government worried, not least due to a stagnation in the real-estate market.
"The property market was seen as good bet," says Lee J Ernst, of Korea's Financial Services Commission (FSC).
He says mortgages would typically have a two-or-three-year repayment holiday built in at the start, during which the property could be expected to rise in value, and so be sold at a profit before any payment was due.
"That was fine as long as property prices kept rising," he says,
"But currently that doesn't work, the market is stagnating," he adds.
Mr Lee adds that as the markets begin to stagnate, people are finding themselves caught out.
He says that they are unable to sell their property for the price they paid.
Cost of borrowing
To make matters worse for the consumers, they are facing steep interest payments as well.
More than 90% of Korea's loans have a variable interest rate, which means when interest rates here rise, so do family bills.
The Bank of Korea recently raised interest rates to try to curb inflation, which is currently running above the government's target range.
But that means families here have even less to spend.
And at a time of falling demand in the West, Korea's economy, half of which relies on exports, could use a boost at home.
The government is trying to slowly tighten banks' lending to prevent a downward spiral.
The FSC says it sees the current levels of household debt as "broadly manageable".
But, it says: "We cannot rule out a possibility that [it] would turn into threats to Korea's economy and financial markets unless we take pre-emptive measures."
In April, it re-tightened debt-to-income limits for mortgages, and plans to issue incentives to encourage more borrowers to switch to fixed-rate loans.
The risk is families with low-credit ratings will have to look elsewhere for loans.
A report by Samsung's Economic Research Institute (SERI) found credit-card spending went up by almost 10% last year, with more cards being issued, and more loans and cash advances being taken out.
More families, it said, had multiple credit cards and multiple credit-card loans, increasing the risk attached.
In June, the government announced measures to curb credit-card companies' excessive expansion, and is bringing in new tax incentives to encourage families to use debit, rather than credit, cards.
But SERI says the poorest households have more than twice the average credit-card debt. They are likely to be the ones caught in the middle of the credit crunch.
The government says it is aware of the need to protect low-income households and has announced plans to bring in extended repayment windows and micro-credit programmes to help off-set the tightening of liquidity.
Credit spending on merchandise fell slightly in the first quarter of 2011, compared with a 4.4% increase during the previous three months.
Household loans are also growing more slowly than before.
But as financial watchers here point out, with demand falling abroad, this is a transition that needs to happen slowly to avoid precipitating the very crisis Korea's trying to avoid.