The Bank of Korea Forecasts Housing Sale Price Increase This Year... Gyeonggi and Incheon Rise After 12·16 Measures

Bank of Korea 'Economic Outlook Report'
Price Increase in Gangnam 3 Districts Slows After 12·16 Measures, Gyeonggi and Incheon Continue Upward Trend
Housing Sale Prices Expected to Rise This Year as Well

[Asia Economy Reporter Kim Eun-byeol] After the government's announcement of the 'December 16 Housing Market Stabilization Measures,' the rate of increase in housing prices in Seoul, centered on the Gangnam 3 districts, significantly slowed down, while Gyeonggi and Incheon continued to see an upward trend.

The Bank of Korea stated in its 'Economic Outlook Report' released on the 27th that "the rise in housing sale prices has slowed since the announcement of the December 16 Housing Market Stabilization Measures last year."

According to the Bank of Korea's survey, the nationwide housing sale price increase rate in January was 0.3%, down from 0.4% in December. In particular, Seoul's increase rate was 0.3%, a sharp decline compared to 0.9% in December last year. The Gangnam 3 districts also saw a slowdown in the increase rate, with housing sale prices rising 1.9% month-on-month in December but only 0.4% last month.

However, in non-metropolitan areas, the increase rate remained around 0.2%, and Gyeonggi and Incheon continued their upward trend with a 0.4% increase, the Bank of Korea reported.

Housing jeonse prices continued to rise due to increased jeonse demand from waiting for subscription applications and other factors.

The Bank of Korea said, "This year, housing sale prices are expected to show an upward trend due to development effects such as the establishment of a metropolitan transportation network in the Seoul metropolitan area and the promotion of national balanced development projects, despite the government's continuous efforts to stabilize the market."

However, next year, with the start of sales of the government's housing supply in the Seoul metropolitan area (86 locations, 300,000 units), including the 3rd New Towns (5 locations, 173,000 units), the upward trend is expected to slow compared to this year.

Regarding housing jeonse prices, it was reported that "a moderate upward trend is expected as the supply of new housing decreases after this year, and waiting demand for subscription to housing supplied on public land increases."

At the February Monetary Policy Committee meeting, the Bank of Korea kept the interest rate steady at 1.25% per annum, considering side effects such as household debt and rising housing prices.

Following the Monetary Policy Committee meeting, Bank of Korea Governor Lee Ju-yeol responded to a question about whether the side effects of interest rate cuts have diminished due to stronger government real estate regulations by saying, "Financial stability cannot be achieved by the government's macroprudential policy alone," adding, "The increase in household loans remains high, and we cannot confidently say that housing prices have stabilized."

This content was produced with the assistance of AI translation services.