South Korea's LH chief warns of possible house-price fall amid loan-rule criticism
In short
Korea Land and Housing Corporation (LH) chief Lee Seong-hun (이성훈) told a parliamentary audit on October 12 that increased housing supply and higher interest rates could lead to a sharp fall in home prices. He said his earlier call for tighter mortgage restrictions was a personal view rather than government policy, while lawmakers questioned its effect on young and first-time buyers.
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Korea Land and Housing Corporation chief Lee Seong-hun (이성훈) said home prices could fall sharply as housing supply expands and interest rates rise, defending earlier comments about tighter mortgage restrictions. He spoke at the National Assembly's land and transport committee audit in Seoul on October 12. Lee said that if prices stabilized, buyers would not lose out by waiting rather than purchasing immediately. [ 3 , 4 ]
Lee told lawmakers that his call to consider tighter lending rules was his personal opinion, not government policy. He apologized to officials at the Financial Services Commission and other authorities for discussing matters outside LH's remit, Newsis reported. Dong-A Ilbo reported that he nevertheless maintained his view that lending restrictions should be tightened. [ 3 , 9 ]
The dispute followed his September 30 remarks about the 600 million won mortgage ceiling for homes costing 1.5 billion won or less and a 70% loan-to-value allowance for first-time buyers. People Power Party lawmaker Kim Eun-hye (김은혜) asked how young people and newlyweds could buy homes if first-time-buyer loans were reduced. Democratic Party lawmaker Jeong Il-yeong (정일영) also criticized the remarks, saying LH should accelerate supply rather than suppress demand. [ 4 , 7 ]
Lee said buyers would begin to feel the effects of LH's supply from 2028 and agreed to take responsibility by resigning if prices were not brought under control, Dong-A Ilbo reported. Seoul Economic Daily said he announced planned starts for 96,000 homes nationwide, including 86,000 in the capital region. He said many projects could begin in November or December and that LH's calculations indicated its annual target could be met. [ 9 , 12 ]
The remarks came amid continued increases in Seoul apartment prices. Citing Korea Real Estate Board data, Dong-A Ilbo reported a 0.12% rise in sale prices in the first week of October, following a 0.09% increase the previous week. Prices had risen for 87 consecutive weeks. Lee said he did not know when prices would turn down but considered a decline a matter of time. [ 9 ]
Why it matters
Lawmakers challenged whether tighter borrowing limits would make it harder for young people and newlyweds to buy homes. The debate comes as Seoul apartment sale prices have risen for 87 consecutive weeks, according to figures reported by Dong-A Ilbo.
Key facts
- Lee told the National Assembly's land and transport committee audit that home prices could fall sharply as supply increases and interest rates rise. [ 3 , 4 , 6 ]
- He said his mortgage-restriction comments expressed a personal view, not the government's position. [ 3 , 9 , 12 ]
- His September 30 remarks questioned the 600 million won mortgage ceiling for homes priced at 1.5 billion won or less and the 70% loan-to-value allowance for first-time buyers. [ 3 , 4 ]
- Lee said housing supply would become noticeable from 2028 and agreed to resign if prices were not stabilized. [ 8 , 9 ]
- Dong-A Ilbo reported that Seoul apartment sale prices rose 0.12% in the first week of October, marking 87 consecutive weeks of increases. [ 9 ]
- Lee announced planned construction starts for 96,000 homes nationwide, including 86,000 in the capital region, Seoul Economic Daily reported. [ 12 ]
Confirmed by several sources
- Lee forecast a possible sharp fall in house prices, citing housing supply and interest rates. [ 3 , 4 , 6 ]
- Lee described his mortgage-restriction remarks as personal views rather than government policy. [ 3 , 9 , 12 ]
- Lawmakers from both the People Power Party and Democratic Party criticized his lending comments. [ 7 , 10 , 12 ]
- Lee agreed to resign if house prices were not stabilized. [ 9 , 10 , 12 ]
- Seoul apartment sale prices had risen for 87 consecutive weeks. [ 9 , 14 ]
Still unclear
- The timing of any house-price decline remains unspecified. Dong-A Ilbo reported that Lee said he did not know when prices would turn down.
What local media are saying
Timeline, local time
- Newsis reported Lee's explanation that his lending remarks were personal views rather than government policy. [ 3 ]
- Yonhap reported his forecast of a possible sharp house-price decline and questions about first-time-buyer loans. [ 4 ]
- Dong-A Ilbo reported his 2028 supply comments and conditional commitment to resign. [ 9 ]