"Raising Interest Rates as Housing Prices Remain Uncontrolled... Why Shift the Blame to Innocent Ordinary Citizens?"

After Bank of Korea's Base Rate Hike, Real Estate Community Flooded with Complaints
Blaming Ordinary People for Real Estate Policy Failures
Increased Interest Burden on Jeonse Loan Borrowers and Actual Demanders... Opinions on Limits to Curbing House Price Rise

[Image source=Yonhap News]

"Since the rise in housing prices isn't being controlled, they are raising interest rates. Why should innocent ordinary people bear the responsibility for the government's failure in real estate policy?"

As the base interest rate was raised following the tightening of real estate loans, dissatisfaction is spreading mainly among actual buyers. It is said that the government, unable to find answers to the failure of real estate policies, has ultimately resorted to increasing the interest burden on ordinary citizens to resolve the situation.

According to the real estate industry on the 28th, right after the Bank of Korea raised the base interest rate from 0.5% to 0.75% per annum the day before, posts condemning the move have continued on domestic real estate internet communities. Mr. A, who plans to move into a home he owns where a tenant currently lives in November after taking out a mortgage loan, said, "There are a flood of inquiries to banks about getting loans in advance, and I have a headache over what to do," criticizing, "The government is shifting the responsibility for rising housing prices onto ordinary people."

Those who have already purchased homes by taking out 'Yeongkkeul (borrowing to the limit)' loans or covered a significant portion of their jeonse (long-term deposit lease) with loans are sighing deeply. Especially, tenants are greatly concerned about the increased interest burden amid the continued rise in jeonse prices since the new Lease Protection Act was implemented last year. Mr. B, who rents a jeonse apartment in Yeongdeungpo-gu, Seoul, said, "It would be fortunate if I had a house, but as a tenant without a home, the increasing interest burden is even more frustrating," adding, "Even borrowing about 400 million won, which is roughly 70% of the average jeonse price of apartments in Seoul, at a loan interest rate of 5%, means an annual interest of 20 million won."

Concerns are also rising that difficulties for the homeless will increase as the autumn moving season approaches. Specialist Kim Hyoseon said, "As loan amounts decrease and costs increase, risks may be greater for actual buyers and vulnerable borrowers," and predicted, "With jeonse loan demand concentrating ahead of the autumn moving season, instability in the jeonse market is likely to worsen."

Although interest burdens increase due to the base rate hike, many believe the effect on suppressing housing prices will be limited given the ongoing supply shortage and rising jeonse prices. Mr. C pointed out, "How can housing prices fall when supply is blocked by restricting reconstruction and listings have dried up due to heavy capital gains taxes?" There were also opinions that it is ridiculous to raise interest rates while disaster relief funds are being distributed before Chuseok. Mr. D criticized, "Are you saying we should pay the increased interest with disaster relief funds? The policy is a comedy."

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