South Korean govt. will announce additional steps to stabilize prices of real estate next week as earlier measures.
South Korean govt. will announce additional steps to stabilize prices of real estate next week as earlier measures by the govt. failed to reduce prices, according to Finance & Economy Ministry announcement made on November 6, 2006.
The announcement is a result of home prices in Seoul & surrounding satellite towns that have risen since October 2006. Loans for buying homes also rose, as lenders didn't expect govt. to reduce surging home prices.
The additional policy announced on November 3, 2006, during emergency meeting involving ministers concerned with economic development, emphasized a need to boost housing supply to curb rising prices.
While some industry experts were in favor of government's decision for shifting their attention to boosting the housing supply from restricting the demand, others are questioning the effectiveness of the policy, highlighting the lack of confidence from the public in property policy.
"Home costs can rise in coming years due to December presidential election & shortage of housing in Seoul & neighboring cities. However, prices are expected to come down in longer-term as anti-speculation methods will be implemented," said an analyst at RNCOS.
Presently, public housing that is built on a public land comes with a cost ceiling. After the govt. removed regulations on costs of apartments offered by private builders in 1997, constructors started to offer more luxurious & convenient apartments at higher prices.
As per Uri Party's representative Park Sang-don, the cost of a 109.2 sq. meter apart was priced at US$ 178,976 (171 Million Won- South Korean currency) on an average in 1998, but prices have increased by over 250% to reach US$ 480,410 (459 Million Won) to buy an apartment.
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