FSC chief says loan curbs prevented steeper home price rises

Financial Services Commission Chairman Lee Eok-won said Thursday that home prices would have risen even more sharply had the government not imposed its strict lending restrictions, pushing back against opposition criticism of the measures.

Speaking at the National Assembly's national audit of the FSC that morning, Lee responded to People Power Party lawmaker Shin Dong-wook, who said Seoul home prices had been climbing for weeks and asked whether the government's loan policy had failed. "If we hadn't done that — the loan regulations — wouldn't it have been even worse?" Lee said.

Financial authorities capped the maximum mortgage loan amount at 600 million won ($448,000) under the June 27 measures introduced last year. This year, regulators tightened aggregate controls further by lowering the target growth rate for household lending across the financial sector compared with last year.

Lee also addressed Shin's challenge over President Lee Jae-myung's remarks about "flattening" home prices, with the lawmaker arguing that rising prices under such a policy would mean the government's measures had backfired. Lee said the government was focused on boosting housing supply and would move quickly to expand it further to stabilize the market. "Real estate is an extremely difficult issue, so we are looking at it comprehensively from multiple angles," he added.

On the June 27 measures specifically, Lee said high-end homes in Gangnam had been driving up prices at the time, and that "most assessments are that the 600 million won policy had its intended effect."