Home prices in Seoul show signs of stability
December 11, 2018 - Seoul
Apartment prices in Seoul, which have continued to shoot up at since the latter half of 2016, are estimated to have hit an all-time high during the first half of 2018, causing a fears of a price bubble.
Though the government unveiled a series of measures to curb the “abnormal” housing prices, ordinary households and many property experts agree that these efforts came too late and had no effect.
A normalization in Seoul’s housing market will almost certainly take a long time, as prices of some apartments in southern and central Seoul surged 500 million won ($448,000) over the past two years. Some units rose by around 1 billion won.
Some apartments in the Gangnam district were thought to have traded at 80 to 90 million won per pyeong, a Korean measurement of property space equal to 3.3 square meters.
A normalization in Seoul’s housing market will almost certainly take a long time, as prices of some apartments in southern and central Seoul surged 500 million won ($448,000) over the past two years. Some units rose by around 1 billion won.
Some apartments in the Gangnam district were thought to have traded at 80 to 90 million won per pyeong, a Korean measurement of property space equal to 3.3 square meters.
These record prices produced speculations that residents in apartment complexes had formed cartels to artificially inflate the cost of their properties. In addition, some alleged other irregularities conducted by speculative investors or multiple housing owners.
Now the government faces charges that weak policies from the Land Ministry, as well as the Bank of Korea’s delay to its hike in benchmark interest rates, allowed wealthy property owners to rake in huge capital gains.
“It is true that the government failed to push for powerful measures -- like levying heavy taxes in proportion to housing prices -- in the critical early stage,” said one real estate agent in Gyeonggi Province. “Though it is late, policymakers appear to be changing their stance to hawkish.”
Property consultant Park Sang-eon picked the coming hefty taxation on multiple housing owners and holders of high-priced apartments for the main factor for investor sentiment declining since the third quarter of this year.
From early 2019 the comprehensive property tax will be increased in addition to a variety of regulations that took effect in the latter half of 2018. Interest burdens are also frustrating the sentiment as the BOK raised its benchmark by 25 basis points in late November.
Now the government faces charges that weak policies from the Land Ministry, as well as the Bank of Korea’s delay to its hike in benchmark interest rates, allowed wealthy property owners to rake in huge capital gains.
“It is true that the government failed to push for powerful measures -- like levying heavy taxes in proportion to housing prices -- in the critical early stage,” said one real estate agent in Gyeonggi Province. “Though it is late, policymakers appear to be changing their stance to hawkish.”
Property consultant Park Sang-eon picked the coming hefty taxation on multiple housing owners and holders of high-priced apartments for the main factor for investor sentiment declining since the third quarter of this year.
From early 2019 the comprehensive property tax will be increased in addition to a variety of regulations that took effect in the latter half of 2018. Interest burdens are also frustrating the sentiment as the BOK raised its benchmark by 25 basis points in late November.
The monthly trading volume of apartments in Seoul hit 3,586 cases in November, a nearly 60 percent decline from the 10,184 cases recorded in October and the lowest since August 2013.
Via The Korea Herald
Photo : Sputnik / Ramil Sitdikov
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Trends, property market, real estate market, real estate prices