FSC chief says 'decoupling real estate from finance' still a work in progress

Financial Services Commission Chairman Lee Eok-won said Wednesday that "people's views on real estate lending are bound to differ," adding that "the process of finding a path that more people can accept is absolutely necessary."

Lee made the remarks at a public forum on real estate finance policy held at the Korea Federation of Banks building in Jung-gu, Seoul, saying that "real estate and finance are the issues that touch people's lives most closely."

The forum was convened to gather expert and public opinion on housing finance and explore policy directions. It was the second in a series, following a housing supply and regulation forum hosted by the Ministry of Land, Infrastructure and Transport on Tuesday. A Ministry of Economy and Finance forum on real estate taxation is scheduled for Thursday, after which a grand public forum presided over by President Lee Jae Myung is set for July 23.

In his opening remarks, Lee said the government "since its measures of June 27 last year has worked under the goal of 'decoupling real estate from finance,' managing both the volume and quality of household loans and steering funds toward productive sectors rather than housing speculation," while acknowledging that "many challenges still lie ahead of us."

He said the household debt ratio "remains higher than in major economies, and the absolute scale is also considerable," adding that "concerns over market liquidity and a shortage of housing supply are keeping anxiety in the housing market alive."

Lee called for candid discussion on protecting the housing ladder for youth and non-homeowners, distinguishing genuine demand from speculative demand, the role of jeonse loans, and the role of finance in supporting housing supply. "A single forum cannot provide all the answers to the issues surrounding real estate finance. We will listen to every opinion raised and review them carefully," he said.

Lee had also said at Tuesday's Cabinet meeting that "in the financial sector, views are divided between those calling for an easing of lending regulations and those who say the current rules should be maintained or tightened given conditions in the real estate market."

The forum opened with a presentation by Kim Young-do, a senior research fellow at the Korea Institute of Finance, followed by a panel discussion featuring Park Sun-young, a professor in the economics department at Dongguk University; Kim Mi-ru, a researcher at the Korea Development Institute; Choi Eun-young, director of the Korea Urban Research Institute; Bae Moon-sung, an analyst at Life Asset Management; Seo Young-su, a managing director at SK Securities; and Lee Dae-yeol, head of the policy division at the Korea Housing Association. An open discussion with the public followed.