Lee Ju-yeol "Strong Government Will... Housing Price Increase Will Be Limited" (Comprehensive)

Lee Ju-yeol "Clearly Effective in Suppressing Speculative Demand from Multi-Homeowners"

[Asia Economy Reporters Eunbyeol Kim, Sehee Jang] The Bank of Korea forecasted that the government's high-intensity real estate measures will be effective.

Lee Ju-yeol, Governor of the Bank of Korea, stated at a press conference immediately after the Monetary Policy Committee meeting on the 16th, "As the COVID-19 situation has somewhat eased since May, expectations for housing price increases have risen, leading to a significant price surge. Looking at the government's recent two rounds of measures, I believe it shows the government's strong determination to stabilize the housing market."

He added, "In particular, I believe the government's real estate measures will definitely be effective in curbing speculative demand from multi-homeowners. Once again, I emphasize that since the government’s determination is strong and the measures are quite robust, housing price increases are expected to be limited."

At the meeting, the Bank of Korea’s Monetary Policy Committee decided to keep the base interest rate steady at 0.50% per annum. The reason for maintaining the historically low rate is due to the slow pace of economic recovery caused by COVID-19 and the expectation that this year’s growth rate will fall below the May forecast (-0.2%).

However, the market viewed that the Monetary Policy Committee refrained from lowering the rate further due to concerns about a surge in real estate and other asset markets. Regarding this, Governor Lee said, "The decision to keep the interest rate unchanged should not be interpreted as reflecting the housing market. Considering the current trends in growth and inflation and future growth prospects, I believe it is appropriate to maintain the current monetary policy stance."

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