SEOUL, Mar. 19 (Korea Bizwire) — The burden of buying a house in Seoul has risen to a 6-year high as demand for homes in the affluent Gangnam district surged despite the government’s measures to cool the property market, data showed Monday.
The Korea Housing Affordability Index rose to 116.7 in the fourth-quarter of last year, up 6.4 percentage points from a quarter earlier, according to the Korea Housing-Finance Corp.
It was the highest quarterly figure since the fourth-quarter of 2011, when the index stood at 119.4.
The index reflects the level of loan repayment for homebuyers with median income who purchase average-priced housing.
Higher numbers indicate more obligations, with an index of 100 meaning that 100 percent of income goes to paying back the principal of home-backed loans.
Nationwide, the index rose 1.2 percentage points from the previous quarter to 61.3 in the fourth quarter of last year.
Early last year, the government unveiled a set of measures to tighten lending rules on homes to try to cool the overheated property sector.
It adopted stricter rules requiring multiple-home owners to pay higher capital gains tax when they sell their houses. Also, the government has toughened the loan-to-value and debt-to-income ratios, which limit homebuyers’ ability to get home-backed loans through their property value and income.
However, home prices in Seoul’s Gangnam district have jumped on rising demand for reconstruction projects in apartment units.