The 19th Real Estate Regulation Measures to Be Finalized on the 20th

[Asia Economy Reporter Yoo In-ho] The government will announce additional real estate measures on the 20th to prevent the balloon effect of the December 16 real estate measures announced last year.

This is the 19th regulatory measure under the current administration. It includes expanding the adjusted target areas to some non-regulated regions in the southern part of Gyeonggi Province and further tightening real estate loan conditions.

According to the Ministry of Land, Infrastructure and Transport on the 19th, the government plans to finalize the real estate measures after holding the Housing Policy Deliberation Committee meeting on the 20th to decide on additional real estate regulation areas.

In particular, among Suwon, Yongin, and Seongnam (Suyongseong), where housing prices have recently surged, it is expected that Suwon’s Gwonseon, Yeongtong, and Jangan districts, which are currently excluded from the adjusted target areas, will be additionally designated.

Anyang’s Manan District and Uiwang City are also expected to be designated as adjusted target areas. Uiwang City, adjacent to Gwacheon and other areas, saw apartment prices rise by 0.74% in November last year and then sharply increase by 2.44% in December, according to Korea Appraisal Board statistics.

In Anyang City, while Dongan District, where Pyeongchon New Town is located, was designated as an adjusted target area, a balloon effect has appeared in Manan District, which is a non-adjusted area. Manan District recorded a high increase rate of 0.99% in November last year, followed by 1.29% in December and 1.25% in January this year.

Areas adjacent to Seoul such as Guri, as well as parts of Osan, Dongtan, and Pyeongtaek (Odongpyeong), are also expected to be included in the adjusted target areas.

Financial loan conditions for adjusted target areas are also expected to be strengthened. The Loan-to-Value ratio (LTV) is planned to be lowered from 60% to 50%. The Debt-to-Income ratio (DTI), currently at 50%, is under discussion to be tightened to 40%, the same level as in speculative overheated districts.

Some suggest that, considering the significant rise in mid-priced apartments priced between 600 million and 900 million KRW due to regulations on high-priced homes such as banning mortgage loans over 1.5 billion KRW, measures to reduce the LTV limit in the 600 million to 900 million KRW range may be introduced.