Due to the reassignment of land transaction permission zones in some areas of Seoul, commercial banks have increased the threshold for lending, leading insurance companies to tighten housing loans.
According to the insurance industry on the 28th, Samsung Fire & Marine Insurance has decided to restrict the handling of housing loans for the purpose of purchasing dwellings for homeowners in Seoul starting April 1. The target is borrowers with more than one dwelling.
Samsung Life Insurance and Kyobo Life Insurance have confirmed that they have already blocked housing loans for multi-homeowners with two or more dwellings. NongHyup Insurance is also restricting loans for the purpose of purchasing dwellings for multi-homeowners. Homeowners wishing to borrow to purchase an additional dwelling must sell their existing home by the date of purchase.
Hanwha Life is effectively raising the loan barriers by adding an additional charge of 0.5 to 0.7 percentage points to housing loan interest rates for multi-homeowners. KB Insurance is also restricting loans for homeowners wishing to purchase additional dwellings.
The background to the insurers' strengthened loan regulations lies in the government's and Seoul city's real estate stabilization measures. As areas such as Gangnam, Seocho, Songpa, and Yongsan have been reassigned as land transaction permission zones, it is interpreted as an intention to preemptively block the 'balloon effect' of loan demand shifting from banks to second-tier financial institutions like insurers.
Industry experts point out that there is a possibility of loan demand shifting again toward capital companies or mutual finance sectors in the future. In particular, if a concentration phenomenon appears in some local NongHyup banks or Saemaul Geumgo, which have relatively loose loan assessments, it is expected that the response level of financial authorities will also increase significantly.
A representative from a financial sector said, 'In the past, when banks and insurers tightened up, there was a pattern of demand shifting to the less regulated mutual finance sector.' They noted, 'If the balloon effect spreads to mutual finance, there is a high possibility that additional regulations or management measures will emerge.'