Minister Noh Hyung-wook: "Interest Rate Hikes and Loan Restrictions Will Help Stabilize Housing Prices"

Minister of Land, Infrastructure and Transport Noh Hyung-wook is presenting the settlement report at the plenary meeting of the Land, Infrastructure and Transport Committee held at the National Assembly on the morning of the 27th. [Image source=Yonhap News]

No Hyung-wook, Minister of Land, Infrastructure and Transport, recently expressed the view that the recent interest rate hike is expected to be effective in stabilizing housing prices.

On the 27th, during the plenary session of the National Assembly Land, Infrastructure and Transport Committee, in response to a question from Jin Seong-jun, a member of the Democratic Party of Korea, who asked, "Yesterday, the Bank of Korea's Monetary Policy Committee raised interest rates; doesn't this create momentum to curb housing prices?" Minister No replied, "It is clear that the interest rate hike and the management of loans will be helpful."

He further explained, "Measures are needed to ensure housing supply and to reassure the public's anxiety." In response to a question from Jeong Dong-man, a member of the People Power Party, asking, "When do you think the real estate market can normalize?" Minister No said, "If supply is steadily maintained and demand-side factors such as interest rates and bank loans are managed, I think effects will appear."

Minister No also emphasized the need to expand pre-sale subscriptions as the number of move-in units will decrease this year and next year. He said, "Although the government announced a housing supply of about 2.05 million units during this administration, which is not insufficient from a long-term supply and demand perspective, this year and next year are stress periods," adding, "This is because supply was reduced 5 to 10 years ago."

Since housing supply and demand instability may worsen until the supply volume increases the year after next, the purpose is to expand pre-sale subscriptions to advance the supply of scheduled move-in units. Minister No stated, "Pre-sale subscriptions are being conducted to advance the sales period of ongoing projects in order to address the shortage of housing units in the metropolitan area and to calm domestic demand sentiment."

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