FSC chief vows to hold loan curbs, pledges targeted support for young, newlywed buyers

FSC Chairman Lee Eok-won said Monday that the government will maintain its household lending controls in an upcoming real estate package while crafting targeted support measures for first-time buyers such as young people and newlyweds.

Speaking at a national housing policy forum at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, Lee said financing was the single most common concern raised by the public. "In fact, the largest share of proposals we received relates to finance — people are most troubled by loan restrictions," he said. "We are working on targeted support that eases the difficulties faced by genuine buyers such as young people and newlyweds without undermining the household lending management framework."

Lee explained why the government sees no room to loosen lending rules. "If we ease loan regulations when supply is insufficient and the market is awash with liquidity, it will stimulate the housing market and push up home prices," he said. "Maintaining strict and consistent controls on household and real estate lending is unavoidable."

He added, however, that finding a way to reconcile those controls with the real hardship facing young people and newlyweds remained a key challenge.

On cases where buyers have been unable to secure balance-payment loans after banks tightened their lending limits, Lee said the original loan conditions at the time of the tenant recruitment announcement would apply even if new regulations had since taken effect.

He added that banks had been imposing additional restrictions of their own as part of the government's overall household loan volume management. "We will consult quickly with the banking sector on the balance-payment loan issue and examine whether there are practical areas that need to be addressed," he said.

Lee also addressed cases in which people who inherited a share of a home as minors are not recognized as first-time buyers. He said the government could consider allowing loans in such cases if a bank's credit review committee determines the circumstances are justified, while keeping the underlying principle intact.

Lee also stressed the need for financial support to expand the supply of non-apartment housing.

"Demand-side financing can risk stimulating the market, but supply-side financing can help stabilize it by increasing the stock of new homes," he said. "We will actively support areas where finance can play a role, including project financing and measures to boost the supply of non-apartment housing."