It was found that the outstanding loan balance of jeonse loans held by nonresident single-home owners who own apartments in regulated areas is nearing 5 trillion won. There is also talk that financial authorities may include measures targeting them in the comprehensive real estate plan to be announced next month.
According to data submitted by the office of Lee In-young of the Democratic Party of Korea, a member of the National Policy Committee, from the Financial Supervisory Service on the 14th, as of the end of March this year, the banking sector's outstanding loan balance for jeonse loans to single-home owners was 13.2 trillion won, with 89,000 contracts tallied.
By region, Gyeonggi accounted for 5 trillion won (33,000 cases), Seoul 3.2 trillion won (20,000 cases), and Incheon 1 trillion won (7,000 cases), showing a high concentration in the greater Seoul area. In particular, the outstanding loan balance of jeonse loans for borrowers who own apartments in regulated areas across Seoul and parts of Gyeonggi reached 4.9 trillion won.
As authorities continue final reviews of a jeonse loan regulation plan, the market expects that nonresident single-home owners who own dwellings in regulated areas while living on jeonse elsewhere will be a primary target of regulation. This is because the loans can be judged to have a stronger investment character than a purpose of actual residence.
The government sees jeonse loans as having fueled home price increases. President Lee Jae-myung also recently said that the expansion of jeonse loans is one of the causes of rising home prices and jeonse fraud.
Currently, jeonse loans are offered based on guarantees from the Korea Housing & Urban Guarantee Corporation (HUG), the Korea Housing Finance Corporation (HF), and Seoul Guarantee Insurance Company. Authorities are said to be seriously considering further lowering these institutions' guarantee ratios from the current 80%.
Measures being discussed include restricting new jeonse loan guarantees for nonresident single-home owners who own apartments in regulated areas and blocking maturity extensions of existing loans. However, exceptions are also expected to be considered in cases of unavoidable reasons such as caring for parents or job relocation.