Financial regulator chief says house prices would have risen more without loan cap
In short
Financial Services Commission chairman Lee Eog-weon (이억원) told a parliamentary audit on October 8 that house prices would probably have risen more without the government's 600 million won cap on mortgage loans, Newsis reported. He also defended managing the total volume of household lending, saying household debt is very high.
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Lee Eog-weon (이억원), chairman of the Financial Services Commission, said on October 8 that house prices would probably have risen more if the government had not capped mortgage loans at 600 million won, Newsis reported. He was speaking at the National Policy Committee's audit of the commission at the National Assembly in Yeouido, Seoul, where he took the witness oath and answered lawmakers' questions, according to Newsis and Maeil Business. [ 2 , 3 , 5 , 6 ]
Shin Dong-uk (신동욱) of the People Power Party asked whether the loan rules had failed to curb house prices, saying Seoul apartment prices kept rising despite the strong lending restrictions. "If we had not done that, it probably would have been worse," Lee replied, according to Newsis. He added that real estate has to be viewed as a whole, including supply and demand, taxes and lending. [ 2 ]
When Shin raised the responsibility of the officials who led the 600 million won cap, Lee said that at the time high-priced housing, including in Gangnam, was driving the market, and that most assess the measure as having been effective, Newsis reported. [ 2 ]
Han Min-su (한민수) of the Democratic Party said the commission had set this year's household loan growth target at 1.5% in April and doubled it to 3% in August, four months later, which he said was hard to see as simple fine-tuning. Lee responded that managing total lending volume is necessary because household debt is very high, according to Newsis. [ 2 ]
Why it matters
The remarks were made at the National Assembly's annual audit of the Financial Services Commission, where lawmakers questioned whether loan rules have worked while Seoul apartment prices keep rising, according to Newsis. Business outlets covered the hearing, which bears on mortgage and household lending policy.
Key facts
- Lee Eog-weon, chairman of the Financial Services Commission, appeared on October 8 at the National Assembly's National Policy Committee audit of the commission and other bodies. [ 2 , 3 , 4 , 5 , 6 ]
- Lee took the witness oath and answered lawmakers' questions at the audit. [ 1 , 5 , 6 ]
- Asked whether lending curbs had failed to rein in house prices, Lee said that without them prices would probably have risen more. [ 2 ]
- Lee said that at the time high-priced housing, including in Gangnam, was driving the market, and that most assess the 600 million won measure as having been effective. [ 2 ]
- Lawmaker Han Min-su (한민수) said the commission set this year's household loan growth target at 1.5% in April and raised it to 3% in August. [ 2 ]
- Lee said total-volume management of household lending is needed because household debt is very high. [ 2 ]
Confirmed by several sources
Still unclear
- Lee's remarks on the 600 million won mortgage cap and on household loan volume management. Reported by Newsis only; the other outlets carried photo captions without his statements.
- The revision of the household loan growth target from 1.5% to 3%. Stated by a lawmaker during questioning as reported by Newsis; no other document gives the figures.