Finance Minister Lee Ok-yeon stated that the ongoing rise in apartment prices in Seoul would have worsened without the government's loan limit of 600 million won. Despite the controversy surrounding the effectiveness of the loan regulations, he maintained that they have helped curb price increases, particularly in the high-end housing market.
During a National Assembly audit on October 8, Lee responded to a question from Shin Dong-wook, a member of the ruling People Power Party, who asked if the government had failed to control housing prices through loan regulations. Lee replied, "If we hadn't implemented those measures, the situation would likely have been worse."
Shin pointed out that the government's June 27 measures limited mortgage loans for home purchases in the metropolitan area and regulated zones to a maximum of 600 million won, yet apartment prices in Seoul continue to rise. He raised concerns that the reduced loan limits have created a market favorable to cash buyers, leading to price increases even in relatively lower-priced areas in northern Seoul and the outskirts.
The so-called 'flattening' of housing prices mentioned by President Lee Jae-myung was also scrutinized. Shin questioned whether the government's policies were effective if they suppressed prices in Gangnam while allowing prices in northern and outer areas to rise.
In response, Lee acknowledged the market conditions and emphasized the need to stabilize the market. He reiterated the government's commitment to increasing housing supply to stabilize the real estate market.
Lee also refuted claims regarding the accountability of officials who designed the June 27 loan regulations. When Shin mentioned former Financial Services Commission Vice Chairman Kwon Dae-young's responsibility for the policy, Lee stated, "At that time, the high-end housing market was driving prices, and most evaluations suggest that the 600 million won measure was effective." He explained that the regulation was a collaborative effort among relevant government departments, including the Financial Services Commission.
The debate over household loan management policies continued, with Han Min-soo, a member of the Democratic Party, highlighting that the Financial Services Commission had set the household loan growth target at 1.5% in April, only to double it to 3% in August. He noted that this adjustment came after issues arose, such as banks exhausting their loan limits and halting loan applications.
In response, Lee reiterated the necessity of managing household debt, stating, "We need to manage it due to the high levels of household debt we currently have."
* This article has been translated by AI.
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