Seoul: President Lee Jae Myung stated on Tuesday that the liquidity directed towards speculative investments in real estate has led to housing instability, emphasizing the necessity to diversify investment options to reduce heavy reliance on property investments. "As investment options have been largely limited to housing or real estate, homes have repeatedly become tools for investment or speculation, leading to housing instability," Lee remarked during a Cabinet meeting.

According to Yonhap News Agency, Lee highlighted the significance of sustaining the current momentum in the stock and financial markets to expand investment opportunities for individuals. "Fortunately, with the recent normalization of the stock and financial markets, alternative investment options are gradually gaining ground," he noted, adding that maintaining this positive trend is crucial.

The Financial Services Commission, last Friday, mandated all local lenders to significantly reduce their household lending. Additionally, mortgage-backed loans for home purchases in the capital region will be capped at 600 million won (US$442,000) starting this week. This policy move marks the first real estate measure under the Lee administration amid escalating household debt and soaring home prices in Seoul.

The presidential office confirmed its close monitoring of the housing market to evaluate the effects of the stricter lending regulations. "The market is currently being monitored to assess how it is responding to the lending rules," stated presidential spokesperson Kang Yu-jung to reporters, adding that ongoing reviews are being conducted on the supply side to meet the demand for new homes.