[비즈한국] With the release of Netflix's 'Squid Game' Season 3, the world's attention has once again turned to a story centered on extreme competition. The game's rule of having only one survivor is provocative, but looking at the recent Korean real estate market, many are reminded of Squid Game. Housing prices in the capital region are skyrocketing; some are taking on excessive debt to buy a home, while others cannot even enter the market because prices have climbed too high. A structure where one person winning an opportunity means someone else loses theirs truly feels like the survival game seen in Squid Game.
In this situation, financial authorities recently announced a new regulation limiting the maximum amount for mortgage loans (home mortgage loans) to 600 million won when purchasing a home in the capital region and regulated areas. Recently, Seoul apartment prices rose by 0.43% in just one week, marking the sharpest increase in 6 years and 9 months. This was compounded by expectations of further price hikes and the possibility of interest rate cuts, leading to a resurgence in demand for buying homes even if it meant taking out loans. A warning light has turned on, indicating that if the government lets this continue, households may become over-leveraged, potentially destabilizing the entire financial system.
According to the Financial Services Commission, less than 10% of all mortgage loan recipients actually borrow more than 600 million won. In other words, rather than directly affecting the majority of actual buyers, this measure is aimed squarely at speculative demand for high-priced homes. The commission emphasized, "The regulatory target is only a small fraction, and the goal is to curb demand that destabilizes the market through reckless borrowing."
The core of this regulation is not simply "making it harder to get a loan," but "preventing people from taking on excessive debt to buy homes." Once it becomes impossible to take out a mortgage loan exceeding 600 million won, the demand that relies on heavy borrowing to purchase expensive apartments will decrease. The financial authorities' plan is that by preventing such speculative, reckless borrowing, they can slow down the excessive rise in housing prices and stabilize the real estate market.
In truth, the reason many people are willing to take on risky loans to buy a home is not just because they "need a place to live." It is because of the belief that "housing prices will always go up." The stronger this belief, the more people are willing to incur debt, even with the burden of paying back millions of won in monthly loan interest. The most important thing the government must do to stabilize the market is to break this "myth of invincible housing prices." Making people feel that they won't be in dire straits if they don't buy immediately—that is the essence of the policy.
The Financial Services Commission expects this regulation to curb speculative home purchases and steer the market back toward actual buyers who truly need homes. In fact, there are reports that since the announcement of the regulations, some real estate agencies are seeing buyers reduce inquiries and shift toward a wait-and-see approach. If the rush to buy a home cools down, it is highly likely that the pace of rising house prices will also slow.
However, regulation alone is not enough. One of the biggest reasons for the surge in housing prices is that while many people want to live in Seoul and the capital region, the supply is insufficient. Without adequate supply, even if regulations are tightened, the "balloon effect" could cause housing prices in other areas to rise, or speculative demand could rush back as soon as the regulations are lifted. Starting with this regulation, the government must prepare comprehensive measures including supply expansion, increased public rental housing, and housing support for those who do not own homes. It is like a game of musical chairs; if there are enough chairs, no one needs to desperately scramble to grab one first.
The real estate market should not be a game where only a few win and the rest are eliminated. A home is a fundamental aspect of life, and everyone should be able to have a safe space to live. The real estate market must not become a structure like Squid Game, where only a few are winners and the rest are cast out. I hope this loan regulation will alleviate the anxiety that forces people to go into debt to buy homes, and serve as a starting point for moving toward a market centered on actual, genuine demand.