South Korea December house prices suffer worst fall in at least 19 years

HOUSE prices in South Korea fell 2 per cent in December 2022 from a month earlier, in the fastest drop since data releases began in late 2003, according to data from the Korea Real Estate Board on Monday (Jan 16).

This marked the seventh consecutive month of declines in the country’s house prices, following a 1.4 per cent loss in November 2022. The overall decline of 4.7 per cent for 2022 reversed a 10 per cent gain in 2021, the board said.

House prices fell sharply around the world as central banks quickly raised interest rates to fight inflation, cooling the economy and pushing up mortgage rates.

For the latest seven losing months, house prices across South Korea dropped by a cumulative 4.9 per cent, also setting the steepest drop for any seven-month period on record, the data showed.

The government of President Yoon Suk-yeol, who took office in May last year, has announced measures aimed at lowering taxes and easing other restrictions, largely unwinding the steps taken by his predecessor.

Conservative Yoon said that house prices had some room to ease after a runaway rally in recent years. However, he noted that any downward adjustment should be made in an orderly manner and without hurting stability in the financial sector.

SEE ALSO

South Korea’s jobless rate climbs as rates weigh on hiring

South Korea set for one more rate hike as risks mount

South Korea December import price growth slowest in 21 months

For three years until May 2022, house prices in South Korea had risen every month. Analysts blamed this on a combination of loose monetary policy, a poor supply of new homes and a policy failure. REUTERS