South Korea’s housing market improved in the fourth quarter of 2014 with actual prices of homes and transaction numbers all going up, a report by a state-run think tank showed Wednesday.
According to Korea Development Institute, the price of homes in the country rose an average 1.3 percent on-year in the October-December period and 1.2 percent from the previous quarter.
Seasonally adjusted, home prices edged up 0.2 percent.
The increase is partly due to the government’s decision to lower loan-to-value ratio and debt-to-income ratios, making it easier to borrow money from lenders, KDI said.
It added that while there has been a drop in construction-related investments, there are indications that demand for new homes may rise.
The latest findings showed transactions hitting 291,555 in the three-month period, up a sharp 8.6 percent vis-a-vis the year before. This, it said, is 30 percent higher than the quarterly average of 224,557. The quarterly average has been compiled by calculating nationwide sales since 2006.
“Overall, the market conditions are continuing to show signs of improvement following the government’s real estate bolstering measures announced in September,” the report claimed.
It said signs of improvement also showed in transaction prices for homes in Seoul and the surrounding Gyeonggi region. Prices edged up 0.5 percent on-year in the last quarter, the first time for such growth after 2010.
The institute said one reason for such rises may be a shortfall in newly-built homes in Seoul and Gyeonggi, home to roughly half of the country’s 50 million population.
The report showed average prices of ‘jeonse,’ or long-term deposit on leased homes, rose 3 percent from the year before. The cost of the lease reached 70 percent of the actual cost of the home in the fourth quarter.
For the whole of 2014, the KDI said sales reached 1,005,173 units, up 18 percent from 2013 and the highest reported since 2006.
In a separate report, the Ministry of Land, Infrastructure and Transport said home transactions surged 34.1 percent on-year in January, with 79,320 homes changing owners.
The report said the monthly tally is the highest ever reached for January.
Sales rose by 32.5 percent in Seoul and Gyeonggi and 35.3 percent in other areas of the country.
Of the total, 36.8 percent were apartments, with town houses and multiplexes accounting for 29.3 percent and single homes making up 25.1 percent. (Yonhap)
