Except for 4 areas in Seoul and Gyeonggi, deregulation of restricted zones

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is speaking while presiding over the Real Estate Related Ministers' Meeting held at the Government Seoul Office in Jongno-gu, Seoul, on the 10th. Photo by Kim Hyun-min kimhyun81@

Government Eases Real Estate Regulations for Actual Buyers

LTV Regulation Raised and Unified to 50% Starting Next Month

[Asia Economy Reporter Kim Min-young] All areas in the metropolitan area except Seoul and Seongnam, Gwacheon, Hanam, and Gwangmyeong in Gyeonggi Province will be removed from the regulated zones. Additionally, starting next month, mortgage loans up to 50% of the house price will be provided to those without a home and one-home owners. Furthermore, to prevent a contraction in housing supply due to concerns over project financing (PF) defaults triggered by Legoland, a PF loan guarantee for unsold houses will also be newly established.

On the 10th, the government held the '3rd Real Estate Related Ministers' Meeting' including the Ministry of Economy and Finance, Ministry of Land, Infrastructure and Transport, and Financial Services Commission, and announced a plan to ease real estate market regulations containing these details. According to this plan, nine areas in Gyeonggi Province including Anyang, Ansan Danwon, Guri, and Gunpo were removed from the speculative overheating zones. Sejong and 31 areas in the metropolitan area (including Suwon, Ansan, Goyang, Namyangju, Hwaseong, Bucheon, Siheung, Gimpo, and Seongnam Jungwon) were removed from the adjusted target areas. As a result, nationwide, all areas except the 25 districts of Seoul, Gwacheon, Seongnam (Bundang and Sujeong districts), Hanam, and Gwangmyeong became non-regulated areas.

Also, the previously announced easing of the Loan-to-Value (LTV) ratio regulation will be implemented early from the 1st of next month. Accordingly, from December 1, the LTV regulation for those without a home will be unified at 50%, and mortgage loans for apartments exceeding 1.5 billion KRW in speculative overheating zones will be allowed. For low-income and actual buyers within regulated areas, the preferential LTV loan limit will increase from 400 million KRW to 600 million KRW. Additionally, starting early next year, regulations on mortgage loans for living stability and rental deposit returns will also be eased.

A PF loan guarantee product worth 5 trillion KRW for unsold houses will be newly established through the Housing and Urban Guarantee Corporation (HUG). Going forward, HUG will support guarantees for PF loans even for unsold projects before completion. However, this must be accompanied by self-help efforts from construction companies to resolve unsold inventory, such as price discounts.

The announcement of the reconstruction safety inspection standards, originally scheduled for later this year, will be moved forward to early December. Along with this, a plan to normalize registered rental housing businesses will also be prepared within the year.

Choo Kyung-ho, Deputy Prime Minister and Minister of Economy and Finance, said, "We will ease regulations that hinder actual buyers from purchasing homes, such as advancing the unification of the LTV at 50% for those without homes in regulated areas and allowing mortgage loans for apartments exceeding 1.5 billion KRW in speculative overheating zones from early next year to early December."

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