Kim Eun-hye: "LTV Should Be Raised Above 90% and Loan Repayment Period Extended"

Kim Eun-hye, a member of the People Power Party, is speaking during the economic sector interpellation at the National Assembly plenary session held in Yeouido, Seoul, last April.
[Photo by Yonhap News]

[Asia Economy Reporter Kim Choyoung] On the 13th, Kim Eun-hye, a member of the People Power Party, criticized the 'Nuguna Jip' project, a real estate supply policy promoted by the Democratic Party of Korea, saying, "It is not a policy that enables people to buy houses but a policy that makes buying impossible," and emphasized, "Without the determination to raise the LTV to over 90% for young people's first-time home purchase, the cycle of despair cannot be broken."

'Nuguna Jip' is a lease-to-own rental housing project where newlyweds or first-time homebuyers can own a home at the initial supply price after living there for 10 years, by paying only 6-20% of the house price in cash. On the 10th, the Democratic Party selected six metropolitan areas including Incheon and Ansan as pilot sites for 'Nuguna Jip' and decided to supply about 10,000 units.

On the same day, Representative Kim wrote on her Facebook, "This announcement is essentially a youth version of the 10-year public rental housing," and pointed out, "Why did residents struggle so much with the 10-year public rental housing? Because while the government promoted 'owning a home,' residents were exploited by arbitrary standards such as sale prices or appraisal values without precise design."

She continued, "In 200 years of market economy history, there is no free lunch. If prices rise, benefits will go to the tenants, but the principal and interest must still be repaid," and asked, "What measures are there to enable repayment of principal and interest then? What alternatives exist to avoid repeating the 10-year public rental housing that throws people back onto the streets?"

She added, "Conversely, if housing prices fall, tenants will give up on purchasing, and developers will suffer losses from unsold units," and questioned, "Who would participate in such an unstable project?"

Representative Kim urged, "The Moon Jae-in administration has pushed young people into the abyss of asset polarization, making it impossible to cover house prices even with loans, let alone salaries," and called for discussions on "extending loan repayment periods to over 30 years to reduce the burden of home purchases."