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South Korean President Lee Jae Myung has come under criticism after property records showed that he and his wife extended credit to buyers of their Seoul apartment, despite his government's strict mortgage lending rules aimed at curbing property speculation. The financing arrangement has triggered political and public debate over whether it contradicts the intent of the housing policy. Lee's office said the apartment was sold below market value and that the credit arrangement was made due to the buyers' financial circumstances.
South Korean President Lee Jae Myung has come under scrutiny after documents showed that he and his wife extended credit to the buyers of their Seoul apartment, even as his government continues to enforce strict mortgage lending restrictions designed to reduce property speculation.
Housing finance reforms have been a key part of Lee's housing policy since taking office. The government has argued that tighter lending norms are necessary to stabilise property prices and improve affordability, particularly in Seoul, where housing costs have continued to rise.
According to property records, Lee sold his 164-square-metre (1,765 square feet) apartment in Seoul for 2.9 billion won (approximately USD 1.97 million). Under the government's lending restrictions, the buyers would have been eligible to borrow only up to 200 million won from banks, which is less than 10% of the purchase price.
Records further showed that Lee and his wife became creditors to the buyers by extending credit worth 1.8 billion won, accounting for nearly two-thirds of the property's value. The arrangement allowed the buyers to complete the transaction despite the borrowing limits imposed under the government's housing policy.
The financing structure has drawn criticism from the opposition People Power Party, which argued that the transaction demonstrated a way to work around the government's own lending restrictions. The party said the President had effectively shown how the loan limits could be bypassed.
The issue gained further attention after Lee had earlier remarked during a cabinet meeting following the sale that he had become "homeless," although he will continue to stay at the presidential residence, the Blue House, for the remainder of his term.
During a cabinet meeting held later, Lee warned that poor housing affordability could harm the country's future and criticised people who use legal loopholes to accumulate wealth. However, he did not refer to the financing arrangement related to the apartment sale.
Responding to the criticism, Lee's office said the apartment had been sold below market value as part of his commitment to helping normalise the property market. It also stated that the decision to extend credit was made because of the buyers' financial circumstances and was not intended to circumvent government policy.
The details of the transaction first emerged through local media reports in the past week and quickly became one of the most widely discussed news stories in South Korea. The arrangement also attracted widespread criticism on social media, where many users questioned why ordinary homebuyers face strict borrowing limits while private financing was used in the President's own property transaction.
The controversy has also renewed debate over the impact of South Korea's tighter mortgage rules on genuine homebuyers. The Lee administration strengthened lending restrictions across the greater Seoul region in the past year to reduce speculative demand and control rapidly rising home prices. However, critics have argued that the measures have also made it increasingly difficult for first-time buyers and middle-income households to enter the housing market.
Data for June showed that the median apartment price in Seoul stood at 1.25 billion won, equivalent to nearly 14 years of the average annual salary, highlighting the growing affordability challenge for residents, especially younger buyers and families looking to purchase their first home.
Commenting on the issue, Kim Yerim, a real estate lawyer at Sim Mok law firm, said the financing arrangement itself was legal but reflected the unintended consequences of the government's lending restrictions. She noted that as property prices have increased and access to bank financing has become more limited, buyers are increasingly relying on alternative financing methods, even though such arrangements may go against the broader objective of the policy.
Source Reuters
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