LH president pushes back on criticism of tighter mortgage rules at national audit
'Supply expansion and rising interest rates could push prices lower,' he says
Korea Land and Housing Corporation President Lee Sung-hoon warned Monday that housing prices could fall sharply, citing an expected expansion in housing supply and rising interest rates.
Lee made the remarks at a National Assembly audit of the Ministry of Land, Infrastructure and Transport and its affiliated agencies on Monday, responding to criticism from People Power Party lawmaker Kim Eun-hye over his earlier call to tighten mortgage lending rules for first-time homebuyers. "There is a real possibility that housing prices will drop sharply, and that is the context in which I made those remarks," Lee said. "Not buying a home right now does not mean you will lose out. The chances of a sharp drop are quite high — we are working hard on supply."
He added that young people and newlyweds should not feel discouraged. "I am actively pushing to expand supply," he said. "With interest rates also rising, there is a good chance prices will not keep climbing and will instead come down considerably."
Lee had previously said, at the site of the Yongin advanced system semiconductor national industrial complex in Gyeonggi Province on Sept. 30, that the 600 million won ($448,000) mortgage cap applied to homes priced at 1.5 billion won or below needed to be tightened to stabilize the housing market.
"For first-time buyers, the loan-to-value ratio goes up to 70 percent, and when you ask the market, many people are taking the maximum and buying homes competitively," he said. "It is time to ask whether that kind of continuous price increase is actually good for our community."
Lawmaker Kim pressed Lee on those earlier remarks, demanding he offer an alternative. "If you cut first-time buyer loans, how are newlyweds and young people supposed to buy homes?" she said.
Lee replied that competitive buying was only necessary if prices kept rising. "If the market stabilizes, there is no harm in not rushing to buy right now," he said. He also noted that housing prices peaked in 2021 before falling significantly as interest rates rose sharply afterward.
At the same hearing, Lee responded to a separate challenge from People Power Party lawmaker Jeong Hui-yong, who said public housing ground-breakings this year had fallen well short of targets. Lee said the numbers showed the annual goal was still achievable. "Most of the volume is at the contractor selection stage at the Public Procurement Service, and once selection is complete, a very large amount can break ground immediately," he said.
He added that the bulk of the pipeline involved private-sector participation projects. "There is an enormous amount that can break ground in November or December," he said.
hss@heraldcorp.com
