New Housing Special Product: Impact on Real Estate Market

New housing special products for newborns offer advantageous loan options for eligible non-homeowners with children born after January 1, 2023.

### Overview of Newborn Special Housing Loans and Their Impact on the Real Estate Market
* 🏡 The Korean government has introduced a special housing loan product for newborns, allowing eligible parents to receive **advantageous loans for purchasing homes**.
* 👶 To qualify for the newborn special housing loan, parents must be **non-homeowners**, with a total annual income below **130 million KRW** and net assets below **469 million KRW**. The target house price is set at **900 million KRW**, with a floor area of **less than 85 square meters**.
* 🔒 Unlike regular loans that consider both Loan-to-Value (LTV) and Debt-to-Income (DTI) ratios, the newborn special housing loan only looks at the DTI ratio, which should **not exceed 60%**.
* 📈 One of the significant advantages of the newborn special housing loan is the **low-interest rate, ranging from 1.6% to 3.3%** depending on income and maturity, which is **much lower than the market rates**.
* 📅 The interest rate is fixed for five years, and it can be **extended to 10 years** by having **another child** within the five-year period.
* 🏠 While the immediate impact of the newborn special housing loans on the real estate market is expected to be limited due to the low birth rate, it could influence housing prices in areas where many newlyweds live, such as **suburbs and new cities**.
* 👀 "It's hard to make a hasty judgment, but I don't think there is **absolutely no impact**. For example, in Gangnam or this area, it is actually **too expensive for newlyweds to enter**, so it may not have an impact, and no one may meet the conditions, but there are places where **many newlyweds live in the suburbs or new cities**."
* 📉 Given the historically low birth rate in Korea, the long-term population decline could have a **more significant impact on the real estate market** than the newborn special housing loans.

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The Impact of Declining Birth Rates on Housing and Loan Products

The decrease in birth rates has led the government to introduce special housing loan products for newborns.

These products are available for babies born after January 1, 2023, with a strict two-year eligibility period.

Pregnant mothers are not eligible, and the program is specifically for non-homeowners as it is a government initiative.

Government Housing Support for Non-Homeowners in South Korea

Non-homeowners with a total annual income below 130 million KRW and net assets below 469 million KRW are eligible to apply for housing support.

The target house value is set at 900 million KRW or below, with a maximum loan limit of 500 million KRW, and the loan-to-value ratio is generally 70%, potentially reaching 80% for first-time buyers.

The challenge lies in finding the right target housing, especially in the metropolitan area where the national average area of 84 square meters is becoming harder to find within the set budget.

Understanding DTI and DSR for Home Mortgage Loans

DTI, or Debt-to-Income ratio, is crucial for this product, with a recommended limit of 60% of income for total expenses.

Natgetne offers the advantage of not considering DSR, which is a major benefit for many people.

The interest rates for Natgetne's home mortgage loans are set much lower than the market rate, ranging from 1.

3%, depending on income and maturity, making it attractive for borrowers.

Understanding the 5-Year Fixed Interest Rate and Possible Extensions

The interest rate is fixed for five years, with the possibility of an additional 0.

55% for lower-income households and the lowest commercial bank rate for higher-income households.

Having another child within five years allows for a 5-year extension, with the government decreasing the interest rate by 0.

The special interest rate benefits apply to children born after January 1, 2023, allowing for a potential advantage of up to 15 years.

The Impact of a New Housing Exception on the Real Estate Market

A new housing exception has led to an increase in inquiries and a desire to raise house prices among sellers.

However, the negotiations between landlords and tenants are delicate, and raising the rent could make deals even more challenging.

The early surge in inquiries is not expected to have a significant impact on the real estate market, especially considering the low birth rate situation.

The Impact of Declining Birth Rates on Housing Prices

The declining birth rate, especially in urban areas, may have a limited immediate impact on housing prices.

However, it could affect the housing market in suburbs and new cities where many newlyweds are choosing to live.

Regional differences in birth rates, such as the unique case of Sejong with a higher birth rate, can also influence the demand for housing in specific areas.