Starting in the second half of this year, group loans such as moving expenses, interim payments, and final balances will be managed separately from each financial institution's total household loan volume, and new total limits for other household loans at individual banks will be set. Accordingly, while capacity to handle general home loans is expected to increase somewhat, financial authorities are continuing their policy of strengthening household loan management, leading to expectations that banks will find it difficult to loosen restrictions prematurely.
According to the financial sector on the 18th, the Financial Supervisory Service will begin conducting meetings with operational staff from commercial banks starting with KB Kookmin Bank on the 19th. During this week's meetings, each bank is expected to set targets for handling group loans and determine total supply volumes for remaining general home loans and other loans.
The government raised the target growth rate for total household loans this year from 1.5% to 3%, doubling it through the the 13th real estate market stabilization measures. In particular, group loans will be managed separately, removed from each financial institution's own loan management targets. This is a measure to allow banks that had halted final balance loans even for those who purchased new apartments before the announcement of the the 27th measures last year in order to meet this year's total household loan limits. Accordingly, banks must now set new total loan volumes excluding group loans, covering general home loans, credit loans, and other loans.
Among borrowers planning to purchase existing apartments rather than newly built ones, attention is focused on the expansion of general home loans. Indeed, since the announcement of real estate measures, inquiries have flooded real estate communities asking when the restrictions on general home loans will be lifted. As margin investing (investing with debt) surged amid a booming stock market and household loans grew primarily through credit loans, banks raised the threshold for new home loan approvals. KB Kookmin Bank lowered its per-person housing purchase loan limit from 600 million won to 300 million won, while Woori Bank limited branch-level home loan limits to 1.12 trillion won. NH NongHyup Bank, Hana Bank, and IBK Industrial Bank of Korea have suspended new handling of variable-rate home loans.
In the banking sector, there is a view that resetting total loan volumes excluding group loans could increase capacity for general home loans compared to before. As of the 13th of this month, the outstanding balance of housing-related loans including individual general home loans, group loans, and rental loans at the five major banks was recorded at 1.1174 trillion won. Considering that the year-end target is 1.7016 trillion won, management has been relatively well maintained so far.
However, projections suggest that the increase itself will be limited. Although the overall net increase target for financial sector loans has doubled, it is expected to focus on moving expenses, interim payments, and final balance loans, with remaining general home loans allocated primarily to actual needers such as young people and non-homeowners. The Financial Services Commission had already stated in its policy announcement on the 13th that increased loan capacity would be utilized for policy purposes including group loans, housing stability for the youth, and alleviating difficulties for actual needers.
The reason authorities are cautious about expanding general home loan capacity is concern that excessive liquidity supply in the market could stimulate rising house prices. Therefore, it is analyzed that increasing handling targets for rental loans or general home loans to twice their previous levels will be difficult.
There is also a view that since the increase in group loans was not large to begin with, even if group loans are removed from individual management totals, the impact will be limited. As of the 13th, the outstanding balance of group loans at the five major banks decreased by approximately 3.5956 trillion won compared to the end of last year.
A banking sector official stated, "Significantly increasing general home loans issued individually is far from the policy direction," and added, "Since group loans are already within the 3rd% total volume, how they will be managed and how much remaining loan volume will be allocated will be specifically determined through discussions with authorities."
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