President Lee Jae-myung on the 21st, addressing polarization stemming from instability in the real estate market, said, "Along with swift supply measures, we will closely prepare support measures for genuine end users that align with reality." In particular, he said he would actively refer to measures gathered at the "National Grand Debate on Real Estate Policy" on the 23rd, which will include the president, Blue House aides, the government, and the general public.
That morning, the president presided over a Cabinet meeting at the Blue House and said, "Only by normalizing real estate issues can we enable productive reinvestment of resources, restore social dynamism, and find clues to resolving conflicts caused by polarization."
He also said that tax systems, including strengthening holding taxes and easing transaction taxes, the core issues in real estate, "will be overhauled fairly and rationally based on public common sense and expectations." The president said, "Real estate stability is the biggest prerequisite for easing polarization," adding, "Our real estate market is a major cause of deepening asset inequality, household liability, youth hardship, and exclusion."
He added, "Entangled extreme speculative demand and anxiety are tying up a considerable amount of social capital in unproductive real estate, blocking economic development," and said, "Real estate windfall gains achieved through illegality and expedients have destroyed fairness and common sense in our society and become the biggest culprit undermining national unity."
The president's mention of "measures for genuine end users" dovetails with the government's "loan regulations." Under the June 27 package last year, the mortgage loan limit in the Seoul metropolitan area was capped at 600 million won. Recently, KB Kookmin Bank unilaterally cut its limit to 300 million won, and this move is likely to broadly affect commercial banks. This is in line with the financial authorities' "household loans total volume regulation."
The appropriateness of loan regulations for young first-time dwelling buyers is also a matter of debate. Even in regulated areas, the loan-to-value (LTV) ratio of 70%, not 40%, applies, but in practice they are also bound by the 600 million won loan limit under the June 27 package. If the dwelling's market price is 1.5 billion won or less, the limit is 600 million won; over 1.5 billion won to 2.5 billion won, 400 million won; and over 2.5 billion won, 200 million won.