"Without parental support, it is impossible to buy a house."
This statement emerged during a recent real estate finance forum hosted by the Financial Services Commission. It succinctly summarized the two-hour discussion. A young participant expressed frustration that the income and asset criteria for policy loans exclude those who truly need assistance, urging for a reduction in barriers.
The response was predictable. Concerns were raised that increasing loans could stimulate housing prices and household debt. The argument is that simply providing more purchasing power in a supply-constrained market would primarily benefit homeowners. Loosening loan restrictions could lead to rising home prices, while tightening them would prevent young people from buying homes.
This dilemma has persisted for years. Both sides present valid points, amplifying the sense of frustration. For many young people, loans are essentially the only means to afford a home, given that current housing prices are beyond what can be saved from salaries alone. At the same time, it is undeniable that increasing loans channels more money into the housing market, supporting higher prices.
The government is aware of this contradiction. Tightening regulations invites criticism of 'kicking away the housing ladder for the working class,' while broadening exceptions leads to accusations of 'supporting housing prices through debt.' It is understandable that the financial authorities are grappling with the potential side effects of either choice.
However, throughout the discussion, a peculiar disconnect was evident. The government focused on how much debt to allow young people to take on, while the young participants questioned why they should have to incur such debt in the first place. They were asking fundamentally different questions in the same forum.
Increasing the limits on policy loans may enhance the immediate possibility of purchasing a home. However, if home prices remain unchanged, the burden of principal and interest that young buyers must shoulder for a lifetime will also increase. While they may succeed in acquiring a home, their lives could become dominated by debt repayment, delaying choices such as marriage, childbirth, job changes, and entrepreneurship.
Conversely, if loan restrictions are uniformly tightened, those lacking cash will be pushed out of the market. Individuals who can receive substantial financial support from their parents will endure, while those who cannot will be excluded. For young people with income but insufficient initial assets, loan regulations effectively become a barrier to entry. Rather than preventing 'parental advantages,' these regulations may reinforce asset disparities.
That said, the call is not to eliminate all loan regulations. Speculative demand and borrowing beyond repayment capacity should certainly be curtailed. However, not all loans should be treated as equal risks. The funding for additional purchases by multiple homeowners and the financing for first-time homebuyers are fundamentally different in purpose. Uniform regulations that do not distinguish between actual residency, income flow, life cycle, and housing prices will struggle to curb speculation while protecting genuine demand.
Policy loans should not merely increase limits. If the government provides loans for home purchases but then leaves borrowers to struggle under excessive repayment burdens, it cannot be considered comprehensive housing support. Measures such as expanding long-term fixed rates, improving repayment structures, and supporting asset formation for young people must accompany any loan provisions.
Financial policy is a tool for addressing housing issues, not housing policy itself. Increasing loan limits may not be laying down a ladder but rather pushing individuals to climb with heavier burdens. Conversely, restricting loans is akin to closing off access to the ladder altogether.
What young people seek is not the right to incur more debt, but a fair opportunity to secure a home based on their own income, independent of their parents' bank balances. The question the government should be asking is not 'Should we loosen or tighten loans?' but rather 'Why has it become impossible to buy a home without debt?' If the question is flawed, the answer will inevitably be flawed as well.
* This article has been translated by AI.
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