This photo taken on Oct. 24, 2022, shows a construction site of an apartment complex in east of Seoul. (Yonhap)
SEOUL, Jan. 3 (Korea Bizwire) — South Korea will lift property-related regulations in most of Seoul and metropolitan areas as the country’s housing market is at the risk of a deep freeze due to strict regulations and higher lending rates, the land ministry said Tuesday.
The government will remove Seoul and its adjacent metropolitan areas from the closely-watched speculative districts except for four districts — Gangnam, Seocho and Songpa in southern Seoul and Yongsan in central Seoul — the Ministry of Land, Infrastructure and Transport said in a statement.
The ministry said the move will take effect Thursday.
Currently, most of the capital city of Seoul and Gwacheon, Seongnam, Hanam and Gwangmyeong of Gyeonggi Province are designated as speculative areas.
To avoid the “hard landing” in the real estate market, the government will also lift the “presale price cap system” across Seoul and metropolitan areas while keeping the system in the four districts in Seoul as well, the statement said.
The presale price cap system, adopted in late 2019 for apartments to be built by private builders amid signs of escalating home prices, has been widely regarded as one of the strongest measures taken by the government to clamp down on housing prices.
It was first introduced in 2007 to curb soaring home prices under the Roh Moo-hyun administration but scrapped in 2015 under the Park Geun-hye government to boost the economy.
In other efforts to support the real estate market, the government carried out eased lending rules for first-time homebuyers and owners of one home from December as the once-hot housing market is entering a downturn.
In recent years, the government has adopted stricter lending rules and other regulations to help stabilize the country’s real estate market.
Home prices are on the decline across the country, and an even sharper downturn in the market is likely, as surging borrowing costs are scaring away buyers.
(Yonhap)
