LH chief Lee Seong-hoon: “You won’t lose out by not buying a home now ... prices could plunge”

[Financial News] Korea Land and Housing Corporation (LH) President Lee Seong-hoon issued a strong warning about the housing market outlook, saying that “home prices are highly likely to plunge.” The concern is that expanded housing supply and the trend of rising interest rates could combine to make reckless “all-in” home purchases—financed by borrowing to the hilt, or scraping together everything, even one’s soul—lead to substantial losses.
On the 12th, Lee appeared at a parliamentary audit by the National Assembly’s Land, Infrastructure and Transport Committee of LH and other agencies affiliated with the Ministry of Land, Infrastructure and Transport. He responded in this way to a question from People Power Party lawmaker Kim Eun-hye about his recently controversial remarks on “tightening loan restrictions for first-time homebuyers.”
Asked about the reasoning behind his remarks on loan restrictions, Lee stressed, “I made those comments with the possibility of a sharp fall in home prices in the future in mind. LH itself is working hard to increase supply, and interest rates are trending upward, so there is a strong likelihood that home prices will stop rising and fall substantially.”
Lee had earlier said on the 30th of last month, at the site of the Yongin Advanced System Semiconductor National Industrial Complex in Gyeonggi Province, that the 600-million-won cap on mortgage loans for homes priced at 1.5 billion won or less needed to be tightened to stabilize the housing market. At the time, he pointed out, “First-time buyers are eligible for an LTV of up to 70%, and many people are maxing that out and competing to buy homes,” adding, “It’s time to take a clear-eyed look at whether home prices continuing to rise like this benefits our society.”
At that day’s parliamentary audit, when Kim Eun-hye pressed him for an alternative, asking, “If you cut even first-time homebuyer loans, how on earth are newlyweds and young people supposed to buy a home?”, Lee did not back down and responded head-on.
Lee emphatically said, “If you assume home prices will keep rising, of course people have to compete to buy homes. But if the market stabilizes, you absolutely won’t lose out by not stretching yourself to buy a home right now.” He added, “We need to remember the precedent of home prices falling substantially in the wake of high interest rates after peaking in 2021,” again urging caution against indiscriminate chase buying.
[email protected] Jeon Sang-il Reporter