"4050s Without Homes?"... Ruling Party Boils Over Considering LTV Easing for Youth and Newlyweds

The Democratic Party Considers Easing LTV to 90% for Youth and Newlyweds
Real Estate Public Sentiment Boiling... "Easing Regulations Now?"
Yun Hojung: "LTV 90% Plan Misrepresented"

Seoul apartment complex view. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

[Asia Economy Reporter Heo Midam] "'Many people in their 40s and 50s have not been able to own a home."

As the ruling party is considering easing the loan-to-value ratio (LTV) on mortgage loans up to 90% exclusively for homeless youth and newlyweds, voices criticizing this move are growing louder. There are concerns that easing loan regulations could inadvertently increase household debt, so policies prioritizing housing price stabilization should come first. Some also point out that policies targeting the youth may cause a sense of relative deprivation among middle-aged and older generations.

Recently, voices within the Democratic Party have been calling for easing real estate tax and financial regulations. Until now, the Democratic Party has mainly implemented policies to curb loans due to concerns over overheated housing prices and soaring household debt, but some lawmakers have recently expressed the view that loan regulations should be significantly relaxed.

The Tax and Finance Subcommittee of the Real Estate Special Committee, led by Kim Jinpyo, chairman of the Democratic Party’s Real Estate Special Committee, is discussing ways to ease loan regulations for youth and newlyweds.

Currently, LTV is limited to 40% in speculative areas and speculative overheating districts, but the main idea is to apply 70% of the non-regulated area rate exclusively to homeless youth.

Additionally, by introducing a 40-year ultra-long-term mortgage with a 20% preferential benefit, homeless youth or newlyweds would be able to finance up to 90% of the housing price. This would reduce the principal and interest burden for young people who take out loans to buy homes and increase the overall loan limit.

However, citizens pointed out that housing price stabilization policies should take precedence over easing loan regulations. If young people rush to buy homes by taking on debt, household debt could surge, so more fundamental solutions are needed.

Office worker Kim (29) said, "Even if office workers earn a salary their whole lives, they cannot afford to buy a home at current prices. Stabilizing housing prices should come first." He added, "Easing regulations might make purchasing a home easier than before, but when will they pay off that debt? The debt burden only increases. We need to lower housing prices so that ordinary people can own homes without taking out loans."

Another office worker, Lee (28), criticized, "Housing prices have already risen as much as they can. What good is easing loans now?" He said, "Office workers have no choice but to earn money to pay off debt their whole lives. In the end, they spend their youth repaying loans."

Photo by Cheongwadae National Petition Board capture.

However, there are also criticisms, especially from homeless people in their 40s and 50s, that easing loan regulations only for youth and newlyweds is unfair. Middle-aged and older generations are equally eager to own homes, so easing regulations only for the youth is inappropriate.

In this regard, a survey showed that about 4 out of 10 people in their 40s living in Seoul and other large cities are homeless. According to a survey conducted by Hana Bank’s 100-Year Happiness Research Center in November last year targeting 1,000 people in their 40s in Seoul and four major metropolitan cities (Busan, Daegu, Daejeon, Gwangju), 44% of respondents were still homeless, dreaming of owning a home. They took out an average loan of 60 million won while renting jeonse or monthly rental houses.

On the Blue House’s public petition board, there have been appeals from people in their 40s saying they are being left out of real estate policies and asking for related policies to be made. On the 3rd, a petition titled "People in their 40s living in jeonse are not even considered citizens of this country; they just have children and wander without owning a home due to private education expenses" was posted.

The petitioner, who identified as being in their mid-40s, said, "Even if we work hard and save for 10 years as dual-income earners, we are worse off than those who bought homes with loans yesterday. We who couldn’t ride the wave of Seoul housing prices are fools," blaming themselves.

The petitioner further criticized that real estate support systems are too focused on youth and newlywed support, saying, "The ones supporting this country’s taxes are people in their 40s and 50s. Is this how you treat the generation that trusted and voted for the Moon Jae-in administration four years ago?"

He requested, "Please consider improving the subscription system and easing loan regulations for homeless people. Please make policies with consideration for the marginalized 40s who are raising children diligently, working dual incomes, waiting for subscriptions, and trying to buy at least one home as homeless."

Meanwhile, the Democratic Party dismissed reports that the party’s real estate special committee plans to ease the LTV to as high as 90% as untrue.

On the 18th, Democratic Party floor leader Yoon Hojung appeared on KBS Radio’s "Choi Kyung-young’s Strong Current Affairs" and drew a line, saying, "It is just a misinterpretation of Party Leader Song Young-gil’s 'Anyone Can Have a Home Project' that has been reported."

He added, "Since Leader Song emphasized supplying rental housing where you can own your home after 10 years with only 10% of the housing price, when asked if the remaining 90% would be loans, he answered by mentioning LTV."

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