South Korea housing market sees rising loan demand and gift-based purchases

South Korea is seeing a significant shift in housing finance patterns. The Newborn Special Loan program saw its execution amount rise to 11.47 trillion won last year, a 21.8% increase from the previous year. Despite this growth, the government has maintained strict income thresholds for dual-income couples at 200 million won and reduced individual loan limits for purchase funds from 500 million to 400 million won.

Concurrently, the Housing and Urban Fund's surplus has dropped to 7.9 trillion won, its lowest level in 15 years. This decline coincides with rising property prices in Gyeonggi Province, where gift and inheritance funds used for home purchases reached 2.3 trillion won between January and August—a 40% increase compared to the previous year.

In Gyeonggi Province, apartment prices have risen by over 5% this year, with notable increases in areas like Suwon, Yongin, and Hwaseong. Experts suggest that rising liquidity and high demand in areas near Seoul are driving these trends, leading to an increased reliance on parental financial support to bridge the gap created by tightening loan regulations.