Financial authorities stabilize the housing market by strengthening the management of loans for multiple property owners.
Financial authorities seem to be preparing to introduce new regulations to strengthen loan management for multiple property owners. The plan generally aims to restrict extending loan terms for owners of apartments within the capital region and regulated areas. This move aligns with the government’s goal of promoting housing market stability by reducing financial support to multiple property owners.
The core of this regulation is to apply the current 0% loan-to-value ratio for new mortgage loans to loan extensions for multiple property owners. Additionally, there are ongoing studies to strictly apply the debt service ratio requirements, initially designed for rental business loans, when extending loan terms. At the same time, financial authorities are discussing capital adequacy regulations requiring financial institutions to hold more capital for loans to multiple property owners.
These regulatory measures were developed after analyzing the balances, collateral types, and regional distribution of loans to multiple property owners during the third meeting centered on the Financial Services Agency. The authorities believe that current data alone is insufficient to measure policy effects, and are conducting more detailed statistical reclassification work.
On the other hand, the Financial Supervisory Agency is conducting data review work in parallel through practical meetings with the financial industry to understand the scale of impact when applying these regulations. To prevent harm to tenants’ rights, authorities are also actively exploring protective measures, such as phased loan reductions or extending lease contracts, rather than requiring lump-sum repayment.
These measures aim to adjust and stabilize the housing market by strengthening management of multiple property owners. It is crucial to closely monitor market reactions and subsequent changes after policy implementation. The long-term effects of the policies and strategies to address unforeseen side effects are also particularly important.