Kim Hyun-mi: "Loan Regulations Will Be Organized Based on Korea Appraisal Board Market Prices"

1.5 Billion and 900 Million Loan Regulations, KB Market Prices Are Practically Used
Meanwhile, 'National Certified Statistics' Are Cited for House Price Increase Rates, Using Korea Appraisal Board Data
In Response to 'Double Standards' Criticism, Korea Appraisal Board Data Will Be Unified

Minister of Land, Infrastructure and Transport Kim Hyun-mi. [Photo by Yonhap News]

[Asia Economy Reporter Lee Chun-hee] The government is expected to unify the housing price standard, which had caused controversy over a 'double standard' by citing Korea Appraisal Board statistics for house price increase rates and effectively using KB Kookmin Bank market prices as the housing price standard for loan regulations.

On the 25th, Kim Hyun-mi, Minister of Land, Infrastructure and Transport, who attended the National Assembly Land, Infrastructure and Transport Committee plenary session, stated, "We will organize (loan regulation standards) centered on the Korea Appraisal Board market prices." When Kim Eun-hye, a member of the Future United Party, questioned, "When applying loan regulations to houses, the higher price between KB Kookmin Bank market prices and Korea Appraisal Board market prices is applied to determine high-priced houses exceeding 900 million won. Why are the standards different each time?" Minister Kim responded accordingly.

Currently, through the real estate measures announced on December 16 last year, the government prohibits loans entirely for apartments exceeding 1.5 billion won in speculative areas and speculative overheating districts, and limits the loan-to-value ratio (LTV) to 20% for the portion exceeding 900 million won for apartments.

The standard for determining the market price uses the higher price between Korea Appraisal Board market prices and KB Kookmin Bank market prices. However, most commercial banks prioritize KB Kookmin Bank market prices, and since KB Kookmin Bank market prices are generally higher than Korea Appraisal Board market prices for most apartments, the market effectively uses only KB Kookmin Bank market prices.

In an earlier inquiry that day, Minister Kim explained, "KB Kookmin Bank statistics are based on asking prices entered by real estate agents, while Korea Appraisal Board statistics are created by investigators focusing on actual transaction prices. Among KB statistics and Korea Appraisal Board statistics, KB statistics have greater volatility, so the Korea Appraisal Board statistics are used as the nationally certified statistics."

However, when Representative Kim pointed out, "When regulating the public, private data is used, and when advantageous, Korea Appraisal Board statistics are used. Isn't this like swallowing when sweet and spitting when bitter?" Minister Kim replied, "We have no choice but to approach loan regulations cautiously. Since such criticisms may arise, we will organize the standards centered on Korea Appraisal Board market prices."

Regarding the criticism that rental prices have surged after the passage of the so-called 'Lease 3 Laws,' Minister Kim said, "It is just confusion occurring during the implementation of a new system," and added, "It will stabilize." She dismissed it as a temporary phenomenon, noting that when the lease period was extended to two years in 1989, rent increases occurred for about four months.

Furthermore, Minister Kim explained the target for housing market stabilization to ensure residential stability for the common people, saying, "Some areas have risen excessively," and "It is desirable for a considerable part to normalize." However, when Representative Kim Eun-hye requested a precise timeline, Minister Kim refrained from specifying, stating, "There are limitations in clearly stating exact criteria."

This content was produced with the assistance of AI translation services.