Interest Rate to Controlled

National Housing Fund is likely to lend money for purchasing or renting multi family house at the rate of 1 percent less than for an apartment.

Loan fund will be allotted to the demanders of multi family house prior to those of apartment.

The Ministry of Construction and Transportation (MCT) announced on the 9th that it is preparing a measure of giving incentives to the demanders of multi family house, as some pointed out that soaring price of house is caused by the demand of house concentrating on apartments. The government will put the measure into operation from second half of this year.

MCT is likely to regulate the scope and conditions of the support from kinds of housing funds after changing operating plan of national housing funds in the first half of this year.

MCT explained that it decided as above, as the price of house may soar in the moving season Autumn due to the unbalance between demand and supply, though successive stabilizing measures for housing market calmed the price of house lately.

MCT had examined the measure to raise the interest rate for the demanders of apartments, but finally decided to maintain the interest rate at the present level for the equity with the persons who had lent already.

However, it will apply the lowered interest rate to the persons who had lent money to purchase of lease multi family house.

In addition, MCT is likely to give priority to the demander of multi family house for loaning housing fund. Specific regulations are not prepared yet, but the priority will be given to the demanders of multi family house rather than those of apartment, and to small house rather than large house.

Han Man-Hee chief of Housing Policy Division in MCT said, “we are studying the measure to break up the demands concentrated on apartments by adjusting the interest rate and the scale of loan fund just preventing national housing fund from going into the red. We will decide the specific interest rate and the scale of loan fund after examining the fund execution plan generally. ”

Jin-Hup Song jinhup@donga.com