Yoon calls for all-out effort in televised emergency meeting

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Yoon calls for all-out effort in televised emergency meeting

Published: 27 Oct. 2022, 18:02 Updated: 27 Oct. 2022, 19:07

President Yoon Suk-yeol heads an economic ministers meeting held at the president’s office in Yongsan on Thursday. The entire meeting was televised for the first time. [YONHAP]

A number of property market restrictions are being rolled back as the government seeks to rescue a market teetering on the edge.

Loan-to-value (LTV) ratios will be increased to 50 percent for first time buyers for properties in restricted areas, which includes all of Seoul. The ratio is currently 20 to 50 percent. The LTV ratio in non-designated areas is 70 percent.

The prohibition on mortgages for properties costing 1.5 billion won ($1 million) or more will be lifted for first-time homebuyers and owners of a single property.

The policy changes were announced by the Financial Services Commission and the Ministry of Land, Infrastructure and Transport Thursday during the eleventh emergency economic meeting headed by President Yoon Suk-yeol.

“The construction and real estate industry within the country is starting to freeze,” Land Minister Won Hee-ryong said.

Due to the heavy restrictions, the land minister said many people that are actually looking into buying homes to live in are struggling, which is also affecting the construction industry.

The land minister said as part of efforts to revitalize the market, the ministry will be announcing additional areas for lighter regulations.

The ministry in September lifted the designation of speculative status for several areas, including Sejong. The status of Seoul remained unchanged.

FSC Chairman Kim Joo-hyun agreed with the land minister, saying that past regulation has been excessive.

“Conditions have changed, including higher interest rates,” Kim said. “We will boldly lift regulations accordingly to the changes so that the real estate market could have a soft landed.”

The key focus of the meeting was on finding ways to revive Korea’s exports. Finance Minister Choo Kyung-ho stressed that exports helped the country sail through a number of financial crises, including the 2008 crisis.

One key issue raised was establishing a stable sourcing network for the supply of key materials, especially for batteries, as the U.S. Inflation Reduction Act makes selling cars in the United States with Chinese battery components or materials more difficult.

“While our secondary battery industry is thriving, the key issue is securing minerals such as lithium,” Choo said. “We are currently dependent on certain countries including China and need to diversify. We need to have a system to secure a stable supply of key minerals.”

Minister of Trade, Industry and Energy Lee Chang-yang responded that the government is currently signing memoranda of understanding with other countries, including Canada, Australia and Indonesia.

The minister said his department is currently working on an extensive measure that would boost Korea’s secondary battery industry, which he emphasized is Korea’s next semiconductor.

During the meeting, Industry and Energy Minister Lee and Defense Minister Lee Jong-sup requested full support from the government in exporting arms and selling nuclear projects overseas.

The ministers stressed that countries that are interested in Korean nuclear energy or in defense products are requesting a “package” of other cooperation in areas in which Korea excels, such as IT.

This was the Defense Minister’s first time attending the meeting.

He said that defense exports have increased dramatically.

FSC Chairman Kim announced that the commission is currently working on a 50-trillion-won program that will support struggling SMEs including a 30-trillion-won fund that will finance SMEs with growth potential.

Business liquidity crunches have become a major concern, and the financial markets are being affected.

During the meeting, Yoon stressed that every government department, even those considered to be unrelated to the economy, should all chip in in supporting Korea’s export.

“The health and welfare ministry is a ministry of social services, the defense ministry is involved in arms and the land ministry is a ministry involved in infrastructure,” Yoon said. “They have to be focused on exports.”

For the first time, the full emergency meeting was televised in its entirety.

The government has been losing support due to the weak economy and the turmoil in the financial markets caused by the default of a Legoland Korea Resort-related company.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]