Housing Stability Solidarity Criticizes Government’s Sudden Household Loan Regulations

The Housing Stability Solidarity (CEO Kim Na-rae) pointed out on the 19th that the government’s sudden household loan regulations are worsening the confusion in the field.

The solidarity highlighted that the execution of the balance of the sales contract has become uncertain, resulting in deposit amounts in the hundreds of millions of won suddenly dropping at new occupancy sites. This has forced landlords to seek emergency funds, while tenants moving in after the implementation of the jeonse loan are concerned about the ‘loanable amount reduction policy.’ As a result, tenants are demanding individual agreements stating, ‘Return the deposit even if it is reduced,’ leading to confrontations with landlords.

The association emphasized that having a notice period before implementing a policy is essential to prevent market confusion. However, the government has implemented real estate policies without notice, causing confusion among contracting parties.

The solidarity group urged policymakers to take emergency measures to reduce the confusion on the ground, stating that the government’s household loan regulations have worsened the situation. They criticized policymakers for repeating heartless apologies instead of taking action.

According to the financial sector, domestic banks have been reducing the maturity of housing mortgage loans, resulting in frequent cases where prospective borrowers have their expected limits reduced. The debt service ratio (DSR) regulation is closely related to this issue, as it limits the ratio of principal and interest repayments to annual income.

The sudden reduction of loan limits without notice has disrupted the real estate plans of many citizens. Borrowers and citizens are being criticized for not having time to prepare for the changes, highlighting the need for more transparent and considerate policy implementation.