Mixed signals could undermine housing market confidence

President Lee Jae-myung has posted 18 messages on X this month about real estate, averaging nearly one per day. On Feb. 20, the president said he instructed the Cabinet and the presidential secretariat to review loan extensions and refinancing for multiple-homeowners and to consider strict regulatory measures. By calling for stricter oversight even of loan maturity extensions, the president appears to be applying broad pressure on multiple homeowners to bring properties to market.

Lee argued that loan extensions and refinancing are essentially no different from new loans. He effectively urged banks to apply the same strict standards to extensions for multiple homeowners as they do to new lending. He also suggested a possible timetable, recommending a phased approach, such as resolving 50 percent of these loans within one year and 100 percent within two years.

Relevant ministries appear to be struggling to keep pace with the president’s rapid-fire messages. After Lee mentioned reforming the registered rental housing system, Land, Infrastructure and Transport Minister Kim Yun-duk said action should be taken if necessary. At a Cabinet meeting, Deputy Prime Minister and Finance Minister Koo Yun-cheol described the May 9 expiration of the temporary suspension of heavier capital gains taxes on multiple homeowners as “perhaps the last chance” to avoid higher rates. Lee quickly rebuked the wording, saying, “There is no ‘perhaps.’”

When Lee posted in the early hours of Feb. 13 asking how existing loans for multiple homeowners should be handled at maturity, financial authorities moved swiftly. The Financial Services Commission convened a sectorwide inspection meeting and held a second session on Feb. 19, shortly after the Lunar New Year holiday, with lending executives from the country’s five major commercial banks and other financial institutions. The sequence of events suggested that ministries were reacting only after the president raised the issues publicly.

When policy directives are issued hastily via social media and authorities scramble to respond, a lack of coordination risks sending mixed signals to the market. Loans to registered residential rental businesses cited by the president are estimated at about 13.9 trillion won at commercial banks alone. Regulators have reportedly yet to determine the scale of similar lending at nonbank institutions, including the National Agricultural Cooperative Federation, the National Federation of Fisheries Cooperatives, credit unions, and community credit cooperatives.

Before tightening regulations, authorities must obtain a clear picture of total loan volumes and maturity schedules. A measured, carefully sequenced approach is essential to minimize unintended consequences, including potential harm to tenants. When policymakers appear rushed or inconsistent, markets are likely to question their credibility.