The ”Yonkuru tribe” has revived by taking advantage of deregulation, and the threshold for loans should be made higher - South Korean report

The 2030 generation of young people (those who borrowed money to buy a home using their souls) are returning to the real estate market. According to documents submitted by the Financial Supervisory Service to Cha Gyu-geun, a lawmaker in the National Assembly,
According to the analysis, the increase in home mortgage loans by the four major city banks in the past year was 32.9 trillion won (approximately 3.56 trillion yen), 12 times higher than last year (2.8 trillion won/approximately 300 billion yen).
The increase was almost 100% in 2017. Looking at the breakdown of the increase by age group, the 2030 generation accounted for 38.9% of the total, far more than any other age group. As housing prices rise, the 2030 generation is getting into debt and lining up to commit housing fraud.
This phenomenon is reminiscent of the Moon Jae-in administration. Around 2019, as housing prices began to rise, the 2030 generation took out loans to buy homes.
The following year, the COVID-19 virus outbreak ushered in an era of ultra-low interest rates, and the boom spread like a hot wind. This led to younger generations drowning in debt and causing housing prices to soar.
This caused a huge burden on the national economy. Later, when high interest rates began to rise around the world, the Yonkul people suffered from high interest rates, house prices fell, and even if they sold their houses, they could not afford to pay the debts.
The recent return of the yongkulls is enough to raise concerns that we may see a repeat of the "yongkull boom" that took place during the Moon administration, which led to a surge in household debt and skyrocketing home prices.
This was triggered by the relaxation of real estate lending regulations. The Yoon Seok-yeol administration plans to increase the collateral recognition ratio from 40% to 70% (real estate lending ratio) in 2022, the first year of its inauguration.
The collateral approval ratio is the ratio of the loanable amount to the price of the house. The Yoon administration had pledged to deregulate, and the real estate market was in a slump at the time.
However, real estate prices have been on the rise since the beginning of this year, and home equity loans have exploded. According to financial authorities, the mortgage loans of the five major city banks rose to 1.2 billion yen in July.
In just the past month, the figure has increased by 7.6 trillion won (approximately 824 billion yen), surpassing the figure during the Moon administration. There are signs that the Yoon administration will repeat the Yeongkuru craze that peaked during the Moon administration.
This raises the risk of a vicious cycle of a surge in home equity loans and rising home prices. A surge in home equity loans has already led to 22 consecutive weeks of increases in apartment prices in Seoul.
In order to prevent the rise in credit ratings, it is necessary to curb the inflow of private funds into the real estate market. To this end, regulations on collateral certification ratios should be strengthened, and the threshold for real estate lending should be raised again.