By Cynthia Kim
SEOUL (Reuters) -South Korea tightened mortgage rules for Seoul on Sunday, unveiling plans to tackle a housing shortage in the capital by adding more affordable homes than previously planned as it leverages land owned by state developers.
The loan-to-value (LTV) ratio for wealthy parts of Seoul, including the areas of Gangnam and Yongsan will be tightened to 40% of the property’s value from Monday, against 50% now.
South Korea has complex borrowing rules for households, especially on mortgage loans, which are linked to income as well as the value and locations of homes.
“As concerns about an upswing in home prices remain latent in the metropolitan area, we need extraordinary measures to stimulate supply while also controlling demand,” the government said in a statement.
South Korea plans to step up use of land owned by state-run companies, including the Korea Land & Housing Corporation, for development, while streamlining rules for the knockdown-and-rebuild of apartments to tackle its housing shortage.
(Reporting by Cynthia Kim; Editing by Clarence Fernandez)
Comments