Administrative guidance to prevent savings banks and credit-specialized finance companies from bypassing the LTV limit regulation with lenders will be extended until March 1 next year.
On the 23rd, Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki held a meeting of related ministers to inspect the real estate market at the government complex in Seoul and discussed the ‘management status and response to loans bypassing regulations on mortgages’.
There is an LTV bypass effect when savings banks and female warriors issue loans using the mortgage lender’s mortgage receivables as collateral. To prevent this, the government has been providing administrative guidance to savings banks and other lenders to apply the LTV regulation when dealing with related loans to lenders since September 2020. From January to August 2020, before the administrative guidance, the new transaction amount of loan companies such as savings banks was 1 trillion won, but it decreased to 300 billion won from January to August of last year.
Deputy Prime Minister Hong said, “It has been confirmed that the bypass loan practice has been largely resolved.” “As there is still a possibility of bypassing regulations through the second financial sector in the process of strengthening household loan management since the second half of last year, the administrative guidance will be extended for an additional year. ” he said. He added, “We plan to examine in more detail various types of loans that try to evade the housing mortgage loan regulation through the Financial Supervisory Service.”
I see that the perception of downward stability in the real estate market is spreading.
Deputy Prime Minister Hong said, “The real estate market has declined for the fourth week in Seoul, for the third week in the metropolitan area, and for the second consecutive week in Gangnam, for two weeks in a row, showing a clear and rapid downward stabilization trend,” said Deputy Prime Minister Hong. In the second week of February, it was expanded to 94,” he said. It was also mentioned that the Bank of Korea’s housing price outlook consumer trend index (CSI) for February also fell below 100 for the first time in one year and nine months at 97.
Deputy Prime Minister Hong said, “In particular, the real transaction price in the 4th district of Gangnam fell for the first time in eight months in November last year, and since the first week of February this year, the market price of stock houses has been falling for two weeks in a row.”
Deputy Prime Minister Hong said, “Despite the low season this month, we are proceeding with the highest level of pre-orders for 29,000 units and 7,000 units. is scheduled,” he said. The number of permits prior to sale was 550,000 units last year, up 20% from the previous year.
He emphasized, “The recent increase in licensing and pre-sale will be reflected in the number of occupants within two to three years, and it is expected to act as a factor in housing supply and further increase until 2030 at a level of concern for oversupply.”
Correspondent Dahyun Choi [email protected]