"To Stabilize the Real Estate Market, Simplify Loan Regulations and Consider Transitioning to DSR Regulation"

KB Financial Group Holds Joint Seminar with Housing Society
Policy Proposals in Finance, Taxation, and Supply for Market Stabilization

[Asia Economy Reporter Kiho Sung] As measures to stabilize the housing market, policies were proposed to first ease the ban on loans for houses exceeding 1.5 billion KRW for single-homeowners and those without homes, who are actual buyers, as well as tax exemption on acquisition tax for first-time buyers and relaxation of mid-term payment loan regulations. In the mid to long term, it is advised to simplify loan regulations and shift from a focus on Loan-to-Value ratio (LTV) to Debt Service Ratio (DSR) regulations.

On the 13th, KB Financial Group, jointly hosting a seminar titled “Exploring Sustainable Housing Policies for Housing Market Stabilization” with the Housing Society, presented 35 policy measures across various fields related to the housing market.

At the seminar, Dr. Minseok Kang of KB Management Research Institute, in his presentation titled “Policy Proposals for Housing Market Stabilization,” identified five core policy tasks for future housing market stabilization: normalizing the demand capacity of actual buyers, strengthening and blocking speculative demand management, stabilizing the rental market, establishing a stable supply system, and managing the housing market in the mid to long term.

To manage speculative demand, it was considered appropriate to reduce deemed rental income benefits for multi-homeowners to ensure equitable taxation on rental income (monthly and yearly rents). Additionally, including jeonse (key money deposit) loans in DSR calculations was proposed as a way to regulate market liquidity through jeonse funds. In the mid to long term, it was suggested to limit public institution guarantees on jeonse loans to vulnerable housing groups. Meanwhile, for single-homeowners, a partial restriction on capital gains tax exemption for frequent transactions was also proposed.

To stabilize the rental market, it was emphasized that expanding supply through qualitative improvement and enlargement of public rental housing, as well as securing the stability of jeonse deposits, is necessary. For this, short-term measures include expanding guarantees for jeonse deposit returns, and mid to long-term measures involve unifying existing rental deposit guarantees and jeonse guarantees, mandating landlords’ subscription while lowering subscription costs.

Furthermore, it was considered necessary to review measures for the financial sector to purchase houses as part of social contribution and utilize them as rental housing, thereby providing a buffer during future housing market downturns.

Additionally, to ensure stable housing supply, a roadmap for urban old housing redevelopment was proposed, along with urban renewal plans such as developing alternative residential areas in the Gangnam area and densifying jeonse housing near major transit stations. The introduction of a bond bidding system in areas under the price ceiling system was also suggested.

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