[6·17 Real Estate Measures] "What about the loan limit?" Flood of inquiries as soon as banks open

Many Factors Including New Enrollment and Renewal Status... Creating Manuals for Response

[Image source=Yonhap News]

[Asia Economy Reporters Kangwook Cho, Hyojin Kim, Minyoung Kim] On the 17th, when ultra-strong loan regulations for stabilizing the housing market were announced, bank branches did not see a rush of customers, but inquiry calls poured in from the moment they opened. At the branches, there were numerous customer inquiries about reduced loan limits, and at PB centers, wealthy clients frequently asked about holding status due to tax strengthening. In particular, most inquiries were from customers living in newly regulated areas and those whose existing jeonse loans were maturing, asking about renewals. Commercial banks expect inquiries to increase once the details of this measure are shared and are focusing on familiarizing themselves with the related content.

For now, commercial banks plan to create a Q&A-style manual based on this measure, post it on the internal bulletin board, and distribute it to branches. Since the financial authorities will deliver the mortgage loan guidelines via official documents, banks intend to focus on system development and preparation work before the regulation takes effect. However, until the regulation is implemented on the 1st of next month, the existing regulations will apply, so branches are concentrating on informing customers to minimize confusion.

Frontline branches of commercial banks are taking a wait-and-see approach regarding detailed policies. A representative from Bank A’s Gongdeok-dong branch explained, "Seoul already has strict loan regulations, so there is not much demand for consultations," adding, "However, as rumors of additional real estate measures have emerged, calls and visits from customers considering mortgage loans have steadily continued over the past few days." He said, "So far, we have been informing customers that if they sign contracts and apply for mortgage loans in advance, the existing regulations will apply."

A credit officer at Bank B’s headquarters expected many inquiries from customers in the newly regulated areas of Gyeonggi Province, Daejeon, and Cheongju due to this announcement. The officer said, "For several days, branches in the newly mentioned regulated areas have been flooded with questions about how the loan regulations will be applied and whether loans will be blocked," and predicted, "Inquiries from customers in these areas will continue without interruption."

Especially, confusion has arisen among customers affected by the significant tightening of the existing standard of 'over 900 million KRW' to a new standard where loans are immediately recalled if a house worth more than 300 million KRW is purchased in speculative or overheated speculation districts after receiving a jeonse loan. A representative from Bank C said, "Among customer inquiries, there were many questions about the policy that restricts loan extensions when existing jeonse loan borrowers purchase apartments exceeding 300 million KRW in speculative and overheated speculation districts."

Bank D’s Real Estate Investment Advisory Center anticipated that corporate-named investments would gradually decrease due to restrictions on corporate housing purchases. They also expected positive effects in curbing speculative demand due to strengthened transaction order investigations, such as enhanced document submission requirements. They forecast that the broad designation of regulated areas would reduce regional balloon effects. However, they expressed concern that funds concentrated in non-regulated areas might flow into mid-to-low-priced housing in regulated areas like Seoul, causing side effects.

Some branch employees expressed disappointment with the government’s regulatory measures. An employee at Bank E’s branch said, "The government says it will block gap investments, but the regulations only target loans; there are no regulations on wealthy individuals," criticizing, "People with money who do not need bank loans can purchase multiple houses, but there are weak sanctions against this." He added, "However, jeonse loan impacts are expected to appear in the metropolitan area."