Housing Price Outlook Remains High Despite Rate Hikes... When Will Effect Kick In?

〈Anchor〉

It is time for Friendly Economy on Tuesday, and reporter Han Jiyeon is here with us. Han, the base rate has gone up quite a bit, but housing price expectations show almost no change?

〈Reporter〉

Expectations that housing prices will rise remain unshaken, and bank mortgage loans are increasing by 2 trillion won every month.

The Bank of Korea conducts a monthly survey asking households across the country what they think housing prices will be like one year from now.

A figure above 100 means more respondents expect prices to rise, while a figure below 100 means more expect them to fall.

This month's index came out at 125, which is identical to last month.

Even though the base rate was raised by 0.25 percentage points for two consecutive months in July and August to reach 3%, the index has not budged at all.

Compared to the rate hike period five years ago, the difference is stark.

In 2021, the index dropped from 129 to 107 after just the second hike, and after the third hike, it fell below 100 altogether, eventually plunging to an all-time low in November of the following year.

Loans tell a similar story.

Bank mortgages have steadily increased by 2 trillion won every month even after the hikes, and this year's loan limits expanded by the government were completely filled up in the single month of August.

A real estate expert explained that as jeonse (lump-sum housing deposits) listings disappear and monthly rent rises, people have few options other than buying a home, which is why the pressure from interest rates is not exerting as much influence as before.

However, the effects of interest rate hikes can appear with a time lag.

Looking at a recent study released by the Korea Research Institute for Human Settlements, when market interest rates such as the CD rate rose by 0.25 percentage points during periods of rising interest rates, nationwide apartment prices fell by 1.2% six months later.

This means it will still take a few more months for the impact to show, so it is premature to conclude that rate hikes have no effect just because expectations have not dropped yet.

The Korea Research Institute for Human Settlements also advised that financial soundness factors, such as household debt and delinquency status, must be monitored together.

〈Anchor〉

Next, the easing of eligibility criteria for the Bogeumjari Loan for newlyweds—this content itself came out a month and a half ago, and it is finally being implemented now.

〈Reporter〉

That is right. Even if a couple's combined income exceeds the threshold, they can apply if one spouse's income is 70 million won or less.

The Bogeumjari Loan is a mortgage loan that allows borrowers to pay back in installments over a long period with a fixed interest rate.

While newlyweds have previously received more lenient income evaluations, it was only assessed based on the couple's combined income.

Under the current criteria, the limits are 85 million won for couples with no children, 90 million won for one child, and 100 million won for two or more children.

As a follow-up measure to the August 13 real estate countermeasures released last month, starting on the 19th of next month, couples will be able to apply even if they exceed this combined limit, as long as one spouse's income is 70 million won or less.

Here, newlyweds refer to those within 7 years of their marriage registration date or those planning to get married within 3 months.

However, you should keep in mind that when being evaluated based on a single person's income, the spouse's income and debts will still be checked, and homeownership status will be calculated by combining both spouses' assets.

〈Anchor〉

What is the final topic?

〈Reporter〉

Banks are currently locked in fierce competition to win over military personnel.

Interest rates on military salary accounts have reached up to 2.5% per annum.

There is a check card used by soldiers called the Nara Sarang Card.

It is issued during the draft physical examination, used to receive monthly salaries and make payments during active service, and can continue to be used even after discharge, making it a tool for banks to secure young customers in advance.

As a result, banks are putting a lot of effort into capturing customers for this card.

Since this is an early morning broadcast, it might be difficult for soldiers to watch in real time, but it would be good for family members to look into it.

Hana Bank decided to raise the preferential interest rate from 1.9% to 2.4% for deposits of military salaries into exclusive Nara Sarang Card accounts starting on the 22nd of next month.

The basic interest rate for this account itself is 0.1%, and adding the preferential rate makes it possible to receive up to 2.5% per annum.

Furthermore, it is a flexible deposit and withdrawal account that allows funds to be deposited and withdrawn at any time.

However, this preferential rate is applied for only 2 years starting from the month the military salary is first deposited.

Currently, the Nara Sarang Card service is shared among three institutions: Shinhan Bank, Hana Bank, and IBK.

As of the end of last month, Shinhan Bank held 46% and Hana Bank held 41.9%, meaning the two banks account for almost the entire market share.

Aside from interest rates, they are also offering PX discounts, exclusive mobile data plans, and popular game events.

Because this project runs until 2033 and new conscripts enter continuously every year, the competition among banks to attract service members is expected to continue for some time.
※ Please note: This article was translated by AI and may contain errors.