The Korean government often implements financial regulations, such as the Loan-to-Value (LTV) and Debt-Service-Ratio (DSR), ratios, to stabilize the housing market. This study investigates the effectiveness of these policies in the housing market and, if effective, determines whether they enhance the utility for housing consumers.

Additionally, the government employs housing supply policies, which greatly impact the housing market. Housing provision is a lengthy and capital-intensive process. Korea supplies most of the new housing through a system known as the pre-sale policy. In fact, this system has consistently faced the challenge of overheating subscriptions for over 40 years. In light of the current housing market dynamics, Chapter 3 explores possible improvements to the existing housing supply policy.

As for the effect of financial regulation, the policy that lowers the upper limit of the LTV ratio from 70% to 40% reduces household loans by more than 31% while increasing the relative price of housing by 0.005%. If the upper limit on LTV ratios is lowered, households experience a low productivity shock, making it difficult to maintain consumption levels by increasing mortgage lending when incomes fall. As a result, they are motivated to increase savings. When the capital stock in the model economy increases due to the increase in household savings, the real interest rate falls. Wealthy households with relatively large amounts of assets reduce the share of financial assets in their asset portfolios and increase the share of housing because the real interest rate, which is the rate of return on investment in financial assets, has fallen.

The analysis in this study reveals that policies tightening household lending regulations do not effectively curtail housing prices in the long run. If the goal is long-term price stabilization, the study suggests that increasing the supply of new housing is more effective than suppressing housing demand through stricter lending regulations.

Lastly, the study proposes a new policy model for improving housing supply, especially for the younger demographic. This model seeks to address both the housing service and investment needs of younger people. Regarding public offerings and transactions of fractional ownership, housing demand is categorized into the demand for residential services and the demand for investment in housing assets. In the current pre-sale subscription method, the share of the house is divided, and public offering subscriptions are received. This method distributes shares to each subscriber in proportion to the competition rate for subscriptions. In this scenario, new housing is provided to young adults as rental properties in line with the existing subscription method to meet the need for residential demand.

Preface
Executive Summary

Chapter 1 Introduction (Inho Song)
References

Chapter 2 Analysis of the Macroeconomic Effects of Household Loan Regulation Policies (Byeonghoon Seok/Hyemi Yoo)
　Section 1 Introduction
　Section 2 Trends in Household Loan Regulations since 2017
　Section 3 Model
　Section 4 Parameter Setting
　Section 5 Analysis Results
　Section 6 Conclusions and Implications
　References

Chapter 3 Directions for Improving Housing Supply Methods: Focus on Enhancing Housing Assets for Young People (Inho Song)
　Section 1 Introduction
　Section 2 Background and Diagnosis of the Expansion of Housing Purchases by Young People
　Section 3 Introduction of blockchain to the real estate industry: A New Proposal for Enhancing Housing Assets For Young People
　Section 4 Public Perception Survey on the Securitization of Fractional Ownership of Housing
　Section 5 Directions for Applying Blockchain Technology to the Domestic Market
　Section 6 Conclusion and Implications
　References
　Appendix

Chapter 4 Conclusion and Policy Implications (Inho Song)

ABSTRACT