SEOUL: Housing prices across South Korea declined in July from a month earlier, marking their first month-on-month fall since March 2009, after a surprise rate hike by the central bank.
Nationwide housing prices in South Korea dropped by an average 0.1% in July from June, after holding flat in both May and June, data from the country's top mortgage lender showed on Tuesday.
"Following the base rate increase, interest rates on home-backed loans turned higher, sparking expectations of a prolonged slump in the property market and undermining demand further," Kookmin Bank said in its monthly report carried on its website.
Home demand remained lethargic as potential buyers were also awaiting low-price housing supply from the government, amid mortgage lending restrictions imposed since last year aimed at battling speculative transactions.
Housing prices in the capital Seoul shed 0.3% from June, extending their monthly decline into a fourth month.
The Bank of Korea unexpectedly raised its policy rate by 25 basis points from a record low of 2.00% in July, for the first time since the onset of the financial crisis.
Governor Kim Choong-soo cited a surge in household loans as a factor behind the rate decision.
Home prices rose 2.7% in July from a year earlier, after a 3.0% advance in June, according to Kookmin Bank.
The construction sector remains a weak spot for the South Korean economy, which posted the fastest growth in the first half among Organisation for Economic Co-operation and Development members.
In July, the government put on hold a plan to announce steps aimed at boosting the property market as policymakers failed to reach an agreement to ease lending caps.
Finance Minister Yoon Jeung-hyun told reporters on Saturday the domestic property market had remained stable relative to the stronger-than-expected economic recovery, and the government needed to monitor the real estate market more before drafting measures to revive home transactions. -- Reuters
Nationwide housing prices in South Korea dropped by an average 0.1% in July from June, after holding flat in both May and June, data from the country's top mortgage lender showed on Tuesday.
"Following the base rate increase, interest rates on home-backed loans turned higher, sparking expectations of a prolonged slump in the property market and undermining demand further," Kookmin Bank said in its monthly report carried on its website.
Home demand remained lethargic as potential buyers were also awaiting low-price housing supply from the government, amid mortgage lending restrictions imposed since last year aimed at battling speculative transactions.
Housing prices in the capital Seoul shed 0.3% from June, extending their monthly decline into a fourth month.
The Bank of Korea unexpectedly raised its policy rate by 25 basis points from a record low of 2.00% in July, for the first time since the onset of the financial crisis.
Governor Kim Choong-soo cited a surge in household loans as a factor behind the rate decision.
Home prices rose 2.7% in July from a year earlier, after a 3.0% advance in June, according to Kookmin Bank.
The construction sector remains a weak spot for the South Korean economy, which posted the fastest growth in the first half among Organisation for Economic Co-operation and Development members.
In July, the government put on hold a plan to announce steps aimed at boosting the property market as policymakers failed to reach an agreement to ease lending caps.
Finance Minister Yoon Jeung-hyun told reporters on Saturday the domestic property market had remained stable relative to the stronger-than-expected economic recovery, and the government needed to monitor the real estate market more before drafting measures to revive home transactions. -- Reuters
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