Experts were split over easing loan regulations for young people. Some raised concerns that if financial support increases without expanding supply, it could fuel rising home prices, while others argued that financial support should be expanded to help young people build asset and seize opportunities to buy dwellings. Opinions also diverged on total household loan volume controls, with some saying the scope of regulation should be expanded and others saying there is no need to maintain it for a long time.
At a real estate finance policy forum hosted by the Financial Services Commission on the 15th, Park Sun-young, a professor of economics at Dongguk University, said, "In 2016, the United Kingdom implemented a policy to support homebuyers by expanding the cap on equity-style mortgages to 20%–40% of the home price," and explained, "As a result, in London, where the price elasticity of dwellings supply is very low, prices for new dwellings rose about 9% more than in comparison areas." Park added, "If financial support is expanded while supply is constrained, it will inevitably lead to higher home prices."
By contrast, Lee Dae-yeol, head of policy at the Korea Housing Builders Association, said, "Young people have insufficient accumulated asset but are a group with a high likelihood of income growth going forward," and added, "If the loan limit is determined solely by current income and asset, buying dwellings may be difficult." He continued, "Without government support, whether parents can provide asset support will determine whether one can buy dwellings, further widening the asset gap within the young generation."
Opinions were also divided over total household loan volume controls. In particular, some argued that the scope of regulation should include private finance. Seo Young-soo, an executive director at SK Securities, said, "The decisive measure that stabilized home prices in the second half of 2021 was the full introduction of the debt service ratio (DSR) and the implementation of total loan volume controls," adding, "In particular, by regulating jeonse deposit loans, we were able to curb the growth of household liability."
He went on, "As circumstances have changed, we need to consider ways to manage private finance such as family lending," and proposed, "During DSR application, identify related details through the source-of-funds statement and reflect them in calculating the loan limit."
On the other hand, Kim Mi-ru, a researcher at the Korea Development Institute (KDI), said, "It is hard to see Korea's household liability as being at a very serious level right now. If it is managed at the current level, the ratio of household liability to GDP is expected to fall from last year." Kim added, "For this reason, I do not think there is a need to maintain total household loan volume controls for a long time."