08.09.202502:38:45UTC+00South Korea Slashes LTV in Seoul to Cool Property Market

South Korea has introduced stricter mortgage regulations targeting affluent neighborhoods in Seoul, effective from Monday. This measure is part of an effort to address climbing housing prices and the capital's pressing housing shortage. In well-known districts such as Gangnam and Yongsan, the loan-to-value (LTV) ratio will be reduced from 50% to 40%. The country’s existing mortgage framework is intricate, considering factors like income, property value, and geographic location to determine loan eligibility. The government stated, "Given the persistent concerns about potential price surges in the metropolitan region, extraordinary measures are necessary to boost housing supply while restraining demand." To increase the availability of affordable residences, the authorities intend to enhance development initiatives on state-owned land, including parcels managed by the Korea Land & Housing Corporation, and to ease regulations surrounding apartment redevelopment. This approach signifies a two-pronged strategy: mitigating speculative buying while expediting supply via public land utilization and more straightforward construction regulations.