Finance Minister Choi Sang-mok announced on Wednesday that the government will implement measures to increase housing supply in response to the growing volatility in South Korea’s real estate market. Choi stated that while housing prices have risen in Seoul and surrounding regions, overall industry indices remain stable. He emphasized the need for enhanced monitoring of the market situation and expedited supply planning, with a commitment to further expanding supply if necessary.
To address the rising household debts, the government plans to gradually tighten lending regulations by introducing stressed debt service ratio (DSR) rules and other measures. Household loans extended by the top five commercial lenders in June surged by over 5.3 trillion won, marking the sharpest increase in nearly three years. The total household loans reached 708.5 trillion won by the end of June, a more than 2 percent rise from the previous year.
Despite criticism, the implementation of stricter DSR rules, originally scheduled for July, has been postponed by two months to support small business owners and low-income earners. Choi affirmed the government’s commitment to boosting domestic demand, improving the job market, and swiftly implementing measures to assist small merchants.
President Yoon Suk Yeol recently announced a 25 trillion-won ($18 billion) support package for self-employed individuals and micro business owners grappling with debts accumulated during the COVID-19 pandemic. The government is focused on providing necessary support to alleviate financial burdens and stimulate economic recovery.