신생아 특례대출Registration date: 23-11-20 12:46
[Real Estate VIEW] Can special loans for newborns support the real estate market?
Taekyung Lee / Deputy Director, Land + Freedom Research Institute
The new special loan for newborns that the Yoon Seok-yeol government will establish next year has a plausible justification as a measure to combat the low birth rate, but it feels more like a successor to Yoon Seok-yeol’s special loan and 50-year mortgage loan. Moreover, the special loan for newborns is expected to have a limited impact on the market compared to the special home loan and 50-year mortgage loan, which played a leading role in the housing price rebound in the first half of this year. The Yoon Seok-yeol government plans to spend more than 34 trillion won in special loans for newborns. According to the ‘2024 Land, Infrastructure and Transport Committee Budget Analysis Data’ published by the National Assembly Budget Office last month, the Ministry of Land, Infrastructure and Transport will spend 26.6 trillion won out of 34.9 trillion won in home purchase loans next year. It was expected that KRW 7.6 trillion won out of the 22 trillion won required for loans for lease and monthly rent would be spent on special loans for newborns and rental deposit loans for households affected by lease fraud.
Meanwhile, the Ministry of Land, Infrastructure and Transport provides direct loans of KRW 8.767 trillion in housing purchase funds and KRW 3.5975 trillion in rent funds through this project, while responding to other loan needs through commercial banks and providing direct loans through the secondary preservation support project. It is said that the plan is to ensure that the same level of interest rate is applied. The secondary preservation support project is a project that supports the interest rate gap with taxes. Let’s take a closer look at special loans for newborns! The newborn special loan is for non-homeowners who gave birth within two years of the loan application date. In the case of a purchase loan, a household with an income of 130 million won or less can receive a loan of up to 500 million won when purchasing a house worth 900 million won or less. The government sets an annual interest rate of 1.6% to 3.3%, which is about 1 to 3 percentage points lower than the market interest rate. An unprecedented interest rate of % will be applied. In the case of a jeonse loan, a low interest rate of 1.1 to 3.0% is applied when a household with an income of 130 million won or less enters a jeonse deposit with a deposit of 500 million won or less in the metropolitan area and 400 million won or less in the regional area. It is noteworthy that special loans for newborns are eligible. This means covering up to the 5th income quintile. The special loan for newborns is an unconventional product in all aspects, including income, target housing, loan limit, and interest rate by income, compared to existing loan products, regardless of whether it is purchase funds or deposit funds.
Is the special loan for newborns a follow-up to the special home loan and the 50-year maturity loan? As is well known, the policy measures utilized by the Yoon Seok-yeol government as the main means of supporting housing prices this year are the special home loan (target amount KRW 39.6 trillion) and the 50-year mortgage loan. It was an expiration date. In fact, the temporary rebound in the housing market in the first half of the year was thanks to special mortgage loans and 50-year mortgage loans. However, as household loans, which had already exceeded the critical point, exploded due to special mortgage loans and 50-year maturity mortgage loans, the Yoon administration stopped the sale of special mortgage loans and tightened 50-year maturity mortgage loans. As soon as this happens, the real estate market loses steam and is entering a second correction. The timing is too elaborate to be a conspiracy theory to think that special loans for newborns will fill the space left by special mortgage loans and 50-year mortgage loans. How much impact will special loans for newborns have on the market?
When news of special loans for newborns came out, some people seemed to be pleased, saying that there was good news in the real estate market. Here, good news means good news for supporting housing prices. Looking at newborn purchase loans, which have a relatively large impact on the market, assuming that the loan limit of 500 million won per household is maximally met based on the budget of 26 trillion won, the loan amount is about 500 million won. Approximately 10,000 households will benefit. Based on 250 million won, which is half of the loan limit, the number of beneficiaries increases to 100,000 households. In 2022, the national apartment transaction volume was approximately 540,000, and this year it is expected to be less than 500,000. If we calculate that the entire budget for newborn purchase loans is exhausted, it would account for about 10-20% of the apartment transaction volume. It is not a small proportion. However, considering that a total of 70,000 units, including 30,000 units for public sale, 10,000 units for private sale, and 30,000 units for public rental, are specially supplied to households with newborns, a significant amount of the newborn purchase loan will be used for special supply such as public sale. Considering that the special mortgage loan, which is much larger than the special loan for newborns, and the weakness of the 50-year mortgage loan lasted only about half a year, the impact of the special loan for newborns on the market is expected to be very limited. There is another thing that should not be overlooked. This is the fact that the exceptionally low interest rate of special loans for newborns is not fixed, but changes to a variable interest rate after 5 years. No one can know what interest rates will be in five years.
For those who can receive special loans for newborns, it would be a good idea to use low-interest products at a level that their income can afford. However, you should refrain from purchasing a home under the mistaken belief that a special loan for newborns can support the price of a home.
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