Tighter Housing rules in South Korea

South Korea implemented tighter mortgage rules and adjust speculations regarding the resale of housing particularly in Seoul and certain parts of Busan which aims to stabilize the housing market and rising household debt. The most recent policy is the extension of policy in November last year when the government began tuning up housing investments amid rising concerns in household debt.

Instead of nationwide adjustments, the government is applying a “targeted approach” particularly to cities with the housing bubble and to lessen the effect on the construction sector.

Starting July 3rd, the government will tighten its loans limits by changing its current 70 percent of property value cost to 60 percent in areas where overheating of the housing bubble is seen.  Debt settlement will also be restricted to 50 percent from home buyers’ annual income in those certain regions. The resale of newly built apartments will be limited until the process of registration in property ownership has been settled.