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Taking aim at housing loans

Jung Ha-won Joong Ang Daily
Taking aim at housing loans - Korea - Financial/Loan - Housing Crisis

The Korean government has officially taken its first major step to rein in home loans and pre-empt a possible real estate price hike since the release of fresh data indicating that lending volume is reaching levels not seen since the real estate bubble in the mid-2000s.

As of yesterday, banks are barred from extending housing loans worth more than 50 percent of the property’s value, down from the previous 60 percent. The new measure targets only those properties in Seoul and its suburban areas. 

The Financial Supervisory Service initially announced the move late Monday.

Experts, however, cautioned that the measure - a possible precursor of more restrictions to come - could chill investment sentiment in other parts of the country where the real state market has not recovered from the downturn. 


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