[비즈한국] The eyes of young people welcoming the new year are fixed on bank loan windows. Prospective homebuyers, who were hamstrung by year-end loan suspensions, are planning to secure funds starting from the 'January 1st loan regulation reset.' However, with the financial authorities' management stance stricter than ever, the 'loan cold wave' is unlikely to dissipate easily in the new year.
Actual residents closely watching amid the 'loan cold wave'
Mr. A, a 29-year-old man working at Samsung Electronics005930, felt anxious seeing the sharp rise in real estate prices this year. Although he has a girlfriend, they have no immediate plans for marriage. Deciding to secure a home first, he set his sights on an apartment in the 800-900 million won range near Bundang, Seongnam, which allows for commuting. He plans to gather funds by combining his 300 million won in savings, 100 million won in credit loans, 200 million won in mortgage loans, and 300 million won in support from his parents in the form of a loan.
He set the purchase timing for early next year after hearing the news about banks suspending loans at the end of this year. Mr. A said, "I decided to sign the contract in January next year because I think interest rates might rise further," adding, "Seeing my friends focus on stocks to buy homes, I want to move as quickly as possible.”
Ms. B, a woman in her late 20s who also works at Samsung Electronics, moved quickly just one year after joining the company. In the first half of this year, she succeeded in a gap investment in a metropolitan apartment with a cash investment of 50 million won. Six months after the purchase, the value rose by 30-40 million won.
Ms. B's next goal is 'actual residence.' She plans to move in herself when the tenant's jeonse lease expires next year. The problem is that an additional loan of over 200 million won is needed. Ms. B is watching the direction of the loan market, planning to secure moving-in funds by checking if loans are available due to tightened government regulations and by comparing loan limits and interest rates across different banks.
Loans used to increase at the beginning of the year...
The 'loan cold wave,' where mortgage loan limits are exhausted, interest rates soar, and thresholds rise at the end of every year, is repeating this year. However, unlike previous years, there is a clear sentiment from authorities at the end of this year that "it won't be easy next year either.”
Banks usually had an atmosphere of resuming loans once the new year began. In fact, major commercial banks relaxed loan regulations even this past January by restoring limits for living stabilization funds or resuming applications through loan solicitors. This year, too, the plan was to release loan volumes, such as by resuming new mortgage applications through solicitors.
However, strong pressure from authorities continues. They intend to strengthen the 'monthly management system' to break the vicious cycle of loan concentration at the beginning of the year and loan suspensions at the end of the year. In particular, they plan to impose penalties, such as cutting next year's loan limits, on institutions that exceeded this year's household loan targets, such as KB Kookmin Bank (at 125% of the target), KakaoBank323410, and credit unions.
Banks also have something to say. They argue that they exceeded their loan limits because the household loan target set during the Yoon Suk Yeol administration was cut in half after the inauguration of the Lee Jae-myung administration. Nevertheless, since the government's will to control loans is strong, there is an atmosphere that unlike in the past, there will be no 'early-year loan expansion.'”
Consequently, the banking sector is paying attention to the Financial Services Commission's (FSC) household debt inspection meeting scheduled for around January 13th. This is because guidelines for new year loan controls are highly likely to be presented. It is predicted that the FSC will order banks to "refrain from aggressive loan marketing from the beginning of the year" at the meeting. The financial authorities' stance is to manage the growth rate of total household debt to be lower than the nominal economic growth rate.
As banks hope to expand their 'loan revenue,' the positions of the banks and the authorities appear to be in direct conflict. One loan solicitor advised, "As loan limits shrink due to authorities' controls and regulations such as the stress DSR (Debt Service Ratio) are strengthened, it doesn't look easy for actual residents to 'raise funds' in the new year," adding, "If you intend to buy real estate, you should approach it after making a concrete plan on how much you can borrow in advance and how much the incidental costs will be.”