The Bank of Korea(BOK) forecast that the household debt to GDP ratio will rebound as housing prices rise, especially in the metropolitan area.

According to the central bank's monetary policy report released on Thursday, the recent surge in real estate prices is expected to lead to an increase in household debt.

The report said that the household debt to GDP ratio, although still high, has been gradually decreasing since 2022,  but is expected to pick up considering the recent household loan trends.

The BOK said the household debt to GDP ratio peaked at 99-point-three percent in the third quarter of 2021 but fell to 92-point-one percent in the first quarter of this year. However, the central bank expects the ratio to jump to 92-point-six percent in the fourth quarter of this year.

It added that factors leading to the rise in real estate prices include continued expectations of a base rate cut, a shortage of new apartments in Seoul and the expansion of policy financing.