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The South Korean government introduced stricter mortgage restrictions for first-time home buyers in Seoul and surrounding areas following a recent rise in apartment prices. The borrowing limit has been reduced from 70% to 40% of the property's value, with a maximum cap of 600 million won (around USD 420,639). The measure, the third under President Lee Jae Myung's administration, aims to address affordability issues as Seoul's price-to-income ratio remains among the highest globally.
The South Korean government announced additional mortgage restrictions earlier this week for first-time home buyers in Seoul and nearby regions, responding to an ongoing surge in apartment prices. Authorities stated that new buyers would now be allowed to borrow only up to 40% of the property's value, a significant reduction from the previous limit of 70%, in an effort to curb escalating home affordability challenges in the capital. Advertisement
The government further imposed a ceiling of 600 million won (approximately USD 420,639) on total borrowing, even if the applicant's income permits higher repayment capacity. This move forms part of a series of interventions aimed at stabilising the housing market, marking the third such measure introduced since President Lee Jae Myung assumed office earlier this year.
Data show that Seoul's price-to-income ratio stands at 21.3, notably exceeding 19.4 in London and 12.4 in Sydney, highlighting the growing strain on affordability for urban households.
Through the newly enforced mortgage restrictions, the South Korean government seeks to temper property price inflation and ease financial pressure on first-time home buyers in the Seoul region. The latest initiative underscores the administration's commitment to stabilising the real estate market, which continues to witness strong price growth and widening affordability gaps compared to other global cities.
Source - Reuters
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