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S. Korea's home transactions tumble on gov't measures, rate hike

Xinhua,December 18, 2017 Adjust font size:

SEOUL, Dec. 18 (Xinhua)-- Housing transactions in South Korea tumbled last month as the government unveiled a set of measures to control speculative real estate investment amid higher market rates on expectations for interest rate hike by the central bank, the infrastructure ministry said on Monday.

The number of home trading was 75,148 in November nationwide, down 27 percent from a year ago, according to the Ministry of Land, Infrastructure and Transport.

It was 16.3 percent lower than an average tallied in the past five years. The November figure was almost similar to the numbers recorded in 2011 and 2012 when bubble in the real estate market had yet to be formed.

Households here rushed to purchase new homes with borrowed money amid the record-low interest rate and the eased regulations on mortgage financing.

Bank of Korea (BOK) cut its benchmark interest rate from 3.25 percent in July 2012 to an all-time low of 1.25 percent in June last year.

However, the Moon Jae-in government, which was launched in May, unveiled a set of measures to control speculative investment in the property market, while tightening standard for mortgage loans of multiple homeowners.

Market interest rate had picked up on expectations for the policy rate hike, and the BOK raised its benchmark rate by a quarter percentage point to 1.5 percent in late November.

As a result, home transactions in capital Seoul plunged 39.7 percent in November from a year earlier, with those in the suburban metropolitan areas dropping 31.7 percent. Enditem