South Korea to announce measures to cool house prices: report
The resurgent housing market could emerge as the first real test for new President Lee Jae-myung
[SEOUL] South Korea plans to announce measures to stabilise spiralling house prices early next month, including tightening lending and tax regulations for overheated areas around Seoul, Yonhap News reported on Thursday (Jun 26), citing unnamed sources.
Apartment prices in the greater Seoul area have soared for 21 consecutive weeks and posted their biggest increase in nearly seven years. The overheating housing market has been a concern for the central bank and governor Rhee Chang-yong said this month cutting interest rates too quickly may spur a rebound in household debt.
The housing market is diverging, with home values in the Seoul metropolitan area jumping more than 16 per cent between January 2023 and April 2025, fuelling demand and speculative sentiment, while non-capital regions have seen stagnant or falling prices, according to the Bank of Korea.
The resurgent housing market could emerge as the first real test for new President Lee Jae-myung, who took office early this month, and vowed to improve affordability.
Lee vowed during the election campaign to expand housing supplies for middle- and low-income families and streamline procedures for builders to win quicker approval, cut costs and eventually sell homes at cheaper prices.
Lee’s spokesperson Kang Yu-jung, when asked at a briefing on Thursday about any impending announcement or discussions on housing policy, said she did not have any information to share.
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The land and finance ministries and other agencies are discussing designating overheated zones, subject to stronger standards in lending and taxation, while Seoul city toughening its own rules to regulate transactions in some areas, Yonhap said.
Jin Sung-joon, chief policymaker of President Lee’s ruling Democratic Party, blamed the previous administration for driving up prices by easing regulations and taxes. He called for an urgent “normalisation” of what he described as “extravagant lending practices.”
“If it is delayed any longer, it will be a huge obstacle to our economy,” he said at a briefing.
The finance ministry said early this month that the government will consider all available policy tools to stabilise the real estate market. BLOOMBERG
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