[Anchor]

Lending policies are also undergoing some changes. As the "loan open run" phenomenon—where people rush to secure loans early—led to growing complaints among genuine homebuyers, the government has doubled its total loan volume target for the year. However, to curb speculative demand, new restrictions on jeonse (lump-sum housing deposit) loans have been introduced for single-home owners who do not reside in their properties.

This is followed by a report from Park Jae-yeon.

[Reporter]

The government has decided to relax its target for household loan growth from restricting it to just 1.5% compared to last year to allowing up to 3%.

This creates room for the top five commercial banks to issue about 4 trillion won more in loans, and approximately 30 trillion won across the entire financial sector.

It is expected that intermediate payment and final balance loans for apartments, which were difficult to process within previous limits, will become more accessible.

This is a response to the demands of homeowners who had already received pre-sales, expecting to secure loans before regulations tightened.

[Lee Eok-won / Chairman of the Financial Services Commission: "For linked loans resulting from new housing supplies, such as relocation and balance loans, we will rationally adjust the total volume targets to ensure smooth transitions from pre-sale to occupancy...."]

However, loans that can be funneled into existing apartments will be tightened further.

A prime example is the decision to block jeonse loans for single-home owners who do not reside in their homes, whom the government has classified as speculative.

This means that homeowners who own a house in regulated areas in the Seoul metropolitan area and have never actually lived in it will be barred from receiving jeonse loans.

The government stated that it does not have an exact count of the number of non-resident single-home owners or the scale of loans that will be subject to this new regulation.

While it also explained that banks could make independent judgments to issue loans in unavoidable cases, it remains to be seen how this will actually be applied in the field.

In addition, the jeonse loan guarantee ratio for the Seoul metropolitan area and regulated zones, currently at 80%, has been lowered to 70%.

A lower guarantee ratio could make jeonse loan screening relatively stricter or reduce loan limits.

With tax revisions increasing incentives for actual residency, there are widespread concerns that jeonse supply will shrink. Combined with the new jeonse loan restrictions, some forecast that the lease market could become even more unstable.

(Photo courtesy of Cho Choon-dong | Video editing by So Ji-hye | Design by Lee Jun-ho)