South Korea mulls targeted loan easing, eyes support for young buyers

South Korea's Deputy Prime Minister and Finance Minister, Choo Kyung-ho, has indicated that the government is actively considering targeted measures to ease loan regulations, responding to growing calls for relief. "We are contemplating 'pinpoint support' to alleviate difficulties," Choo stated in a radio interview, signaling that additional measures would be announced soon.

Choo acknowledged the specific concerns raised about the real estate market, particularly in affluent areas like Gangnam, where a lack of accessible financing is reportedly limiting sales. He expressed empathy for the argument that loan restrictions need to be relaxed for certain groups. "We agree on the need to ease measures for ordinary citizens and first-time homebuyers, such as young adults and newlyweds," he said, differentiating these groups from those seeking to purchase high-priced properties.

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We agree on the need to ease measures for ordinary citizens and first-time homebuyers, such as young adults and newlyweds.

The government's broader strategy includes accelerating housing supply, with a particular focus on non-apartment options to complement longer-term apartment construction projects. Alongside these supply-side efforts, Choo confirmed that diverse housing finance measures are being prepared to ease the financial burdens on young couples and first-time buyers. This approach aims to balance market stability with support for vulnerable demographics.

Regarding recent real estate tax reforms, Choo explained that the changes largely benefit homeowners of properties valued under 3 billion won by reducing both holding and transfer taxes. For properties between 4 billion and 5 billion won, the tax burden will increase gradually. He also clarified that the temporary easing of capital gains tax surcharges for multiple homeowners in regulated areas is not a deferral but a measure to allow for gradual adaptation to increased holding tax burdens. The government is also monitoring the impact of increased minimum deposit requirements for single-stock leveraged ETFs, noting a moderation in market volatility since the measure was implemented.

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We are contemplating 'pinpoint support' to alleviate difficulties.