President Park Geun-hye’s Finance Minister nominee Choi Kyung-hwan on Monday reiterated that he may seek to ease the nation’s housing market regulations in a move to help prop up the sluggish local property market.
In a written answer to questions from lawmakers ahead of a confirmation hearing scheduled for Tuesday, Choi Kyung-hwan also said that he was not considering a supplementary budget at the moment, but that it would be an option if the economy falls into a recession.
President Park tapped the third-term lawmaker of the ruling party for the post of finance minister last month in a Cabinet reshuffle. He would concurrently serve as the president’s deputy prime minister for economic affairs.
|Finance Minister nominee Choi Kyung-hwan (Yonhap)|
This is not the first time that the pro-growth minister nominee has hinted that he is toying with the idea of revising the loan regulations. His main complaint about them is that they are too outdated, and thus inefficient for coping with the current circumstances of the real estate market.
“It has been a decade since loan-to-value and debt-to-income rules were introduced, and there is a need to adjust the rules and rationalize them,” Choi said.
The rules, which are designed to control the amount of loans for home buyers based on their income and ability to pay back debts, were introduced during a housing boom. Critics opposing the changes say easing them could worsen Korea’s rapidly growing household debt.
After he was nominated, Choi hinted that he could ease the rules, saying on June 15 that the current housing market regulations are “like wearing summer clothes during winter.”
“As for detailed rationalization plans, relevant ministries and agencies will hold discussions by taking into consideration such aspects as (the potential impact on) household debt and the property market situation,” Choi said.
The nominee says he is not considering an extra budget, but is leaving the possibility open.
“My assessment is that the economy is not in a recession ... At this moment, I am not considering extra budget spending,” he said. However, “if the economic situation changes for the worse, slips into a recession and meet the requirement for additional spending, we could review it by reflecting diverse factors including fiscal conditions.”
By Oh Kyu-wook and news reports