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After years of struggling to curb household debt, South Korean policy makers have devised a plan that economists say will work. Yet it is likely to come at a cost: Hurting the drivers of the nation’s growth.

South Korea’s household debt rose to a record 1,166 trillion won ($992 billion) at the end of September, a 10 percent increase from the previous year. That debt now accounts for 143 percent of aggregated disposable income, central bank data shows.

Further, the Bank of Korea said in a financial stability report Tuesday that households’ fiscal soundness deteriorated as growth in debt accelerated while little improvement was seen in incomes.

The debt burden and the pace of its increase, along with concerns that the higher U.S. benchmark interest rate could push up rates in Korea and steepen borrowing costs, prompted the government to respond. Here’s the plan: From as soon as February 2016, new home buyers will have to take out amortized loans instead of the interest-only payments that are common practice in Korea. Banks also will strictly scrutinize borrowers’ income and repayment ability.

The risks are that the measures could cool South Korea’s housing market, which reported the most transactions this year since 2006, supported by a record-low benchmark rate. Consumption also could be affected as monthly debt installments rise and the so-called “negative wealth effect” kicks in, because a majority of Koreans’ wealth is in real estate.

“There is no free lunch, no policy that can boost domestic demand while curbing debt growth,” said Oh Suk Tae, a Seoul-based economist for SG Securities Co. “The gist of the new policy is that taking out mortgage loans will become tougher. That’s a definite negative for the property market and also for consumption.”

Korea’s economic growth in the third quarter surprised analysts, as the gross domestic product rose 1.3 percent from the previous three months, the fastest pace in more than five years. Private consumption added 0.6 percentage point and construction investment 0.7 percentage point, while net exports stripped 0.8 percentage point. The government is looking to an improvement in domestic demand to steer the economy next year.

Property Prices

Still, a slowdown in Korea’s economy looks inevitable from the second half of 2016 as mortgage loan growth will ease, weighing on residential property prices and a consumption recovery especially when new lending rules are applied to a wider geographic area starting in May, according to a Samsung Securities Co. report this month.

“Interest rates are likely to move upward with the Fed’s tightening, and combined with the new amortized loan rules, debtors’ repayment burden will rise,” said Huh Moon Jong, an economist at Woori Finance Research Institute in Seoul. “This will effectively reduce disposable income and hit consumption.”