Baekdusan Korea Investment & Securities researcher said on the 16th that with regard to the "Oct. 15 dwelling market stabilization measures," the sensitivity of household loan growth and bank stock prices has decreased, and that the firm maintains an "overweight" view on the banking sector.
With these real estate measures, regulated areas and land transaction permit zones were expanded to all of Seoul and 12 areas in Gyeonggi Province. In these areas, the loan-to-value (LTV) ratio for dwellings mortgage loans was lowered from 70% to 40%, and the credit limit for high-priced dwellings mortgage loans was also tightened.
Researcher Baek pointed to the significantly expanded scope of regulated areas as a part where regulations were strengthened more than expected. On the other hand, Baek said it was a relatively eased part that the LTV for mortgage loans on dwellings priced over 1.5 billion won is not 0%, and that application of the total debt service ratio (DSR) for jeonse loans applies only to single-home owners.
Researcher Baek said, "It appears the policy focus is on responding to the rise in dwelling prices in the greater Seoul area driven by a balloon effect from high-priced dwellings, while the growth in household loans in the financial sector has already slowed due to the June 27 measures and total volume controls."
Researcher Baek explained that productive finance and the value-up policy have become key variables for bank stock prices, and that, with total household liability controls a constant, there is little room in the short term to revise down estimates for household loan growth. The gist is that the Oct. 15 measures will not lead to weakness in the banking sector.
Researcher Baek said the level of total household liability controls in 2026 is a variable. Baek said, "Because the nominal gross domestic product (GDP) growth rate in 2026 is expected to improve significantly compared with 2025, it remains undecided whether to keep total household loan controls at this year's level or raise them."