Real Estate Prices Rise Despite Tougher Curbs

      June 26, 2020 13:23

      Apartment prices in Gyeonggi Province and the port city of Incheon west of Seoul increased sharply after the government announced more regulations to curb speculation on June 17.

      Apartment prices continued to rise in areas that were either newly subject to tougher curbs on housing loans or face them in the near future, as well as in parts that were not included.

      Proponents of the government's measures to tame apartment prices said the new regulations will need time to show their effect, but critics said they have simply backfired as prospective home buyers became nervous and bought fast.

      Apartment prices in the Seoul metropolitan area rose 0.28 percent over the last week, the Korea Appraisal Board said on Thursday. The government has so far announced tougher regulations over 20 times, but paradoxically real estate prices soared whenever it did.

      Apartment prices in Seoul edged up 0.06 percent, which was similar to the previous week (up 0.07 percent). But in Gyeonggi Province they rose 0.39 percent and in Incheon 0.34 percent.

      The average increase across the country was 0.22 percent, the biggest-ever weekly rate of growth since May 2012.

      The KAB said, "Apartment prices rose in some areas of the capital, but buyers' sentiment sharply contracted after the latest regulations." In other words, the impact of the new regulations has yet to be fully reflected in the figures.

      Shim Gyo-eon at Konkuk University also said, "Soaring demand prior to the new regulations was probably reflected in the latest figures. The surge in the capital region will ease somewhat after they begin to take effect."

      But real estate analyst Lee Sang-woo said, "There is ample liquidity in the market, but after the tougher measures were announced, prospective home buyers are beginning to wonder if this might be their last chance to buy an apartment, so we will see prices continue to rise."

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