Housing prices in South Korea seem to be on a sustained recovery path, data showed Friday, reflecting growing demand for home purchases amid eased lending circumstances.
Seoul apartment prices gained 0.55 percent on-month in April, accelerating from a 0.45 percent increase in March, according to the data compiled by Kookmin Bank, the flagship unit of the country’s second-largest banking group, KB Financial.
Since the end of last year, apartment prices in Seoul have jumped 1.31 percent, surpassing last year’s overall gain of 1.09 percent, the data showed. On a nationwide basis, apartment prices also climbed 1.44 percent since the end of December, marking an on-month rise for the 20th straight month.
The rise in housing prices came as the country’s central bank slashed its base rate by a total of 0.75 percentage point over the past few months to help Asia’s fourth-largest economy maintain its recovery pace.
For the month, the Bank of Korea held the rate steady at a record low of 1.75 percent.
Also, the government eased lending regulations, particularly on mortgage loans, last year to help boost sagging property prices.
The monthly data also showed that prices of so-called “jeonse” apartments in Seoul rose 1.1 percent on-month in April and 3.19 percent from the end of last year.
Jeonse is a local property lease system in which tenants pay their landlord a large deposit instead of monthly rent. It usually involves a two-year contract.
Supply for such deals has been falling as homeowners are increasingly opting for monthly rents amid low bank interest rates.
“Jeonse supply is forecast to dry up as expectations for gains in home prices are low and homeowners are rapidly shifting to monthly rent contracts following a series of rate cuts,” said a bank official.
The latest data is in line with government data released earlier this month.
The number of home transactions in South Korea reached 111,689 in March, up 24.4 percent from a year earlier, according to the Ministry of Land, Infrastructure and Transport. The figure marked the highest ever for March since the country began compiling related data in 2006. (Yonhap)
