More than 90,000 jeonse (lump-sum deposit lease) loan guarantees were provided to single-home owners by real estate-related guarantee institutions last year, data showed. With the government signaling loan restrictions on speculative single-home owners, observers say most single-home owners who received jeonse loan guarantees are likely to fall within the scope of the new regulations.
According to data submitted to Rep. Kim Sang-hoon of the People Power Party on the National Assembly's Political Affairs Committee by Korea Housing Finance Corporation (HF), Housing and Urban Guarantee Corporation (HUG), and SGI Seoul Guarantee, the three institutions issued a total of 90,220 jeonse loan guarantees to single-home owners last year. While this represents a 6.3% decline from the previous year's 96,274 cases, the figure still exceeds 90,000.
Of these, 72% (64,960 cases) were issued in the Seoul metropolitan area. The remaining 28% were processed in non-metropolitan regions. The total value of jeonse loan guarantees issued to homeowners reached 13.94 trillion won ($10.3 billion), accounting for 12.7% of total guarantees worth 109.4 trillion won.
The government is currently reviewing loan restrictions targeting speculative single-home owners. Analysts suggest authorities will filter out non-resident single-home owners who are temporarily living away from their properties due to education or work, then implement jeonse loan restrictions on those deemed speculative.
Market observers note that financial authorities are likely to limit jeonse loan guarantees for such speculative single-home owners. Given that jeonse loan contracts typically run for two-year terms, approximately 90,000 single-home owner households that received jeonse loan guarantees from the three major guarantee institutions last year would be first affected by the loan restrictions, according to analysts.
However, some within and outside financial authorities say defining speculative single-home owners will not be easy. "Each bank currently has its own criteria for filtering out single-home owners who are temporarily non-resident due to genuine necessity," a financial industry official said. "If bank standards are applied mechanically, regulations could become excessively complex, which is a major concern for the authorities."
