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This photo, taken on November 24, 2022, shows the Korean Bank Bank building in Seoul, South Korea.
Van Ilian | Newhua News Agency | Gets the image
The Central Bank of South Korea conducted its political level by 2.5% on Thursday as it assesses the impact of the latest measures to cool the Seoul housing market.
According to Goldman Sachs, housing prices in Seoul increased over 19% Connect with measures Household loans are expanding quickly.
The Bank of Korea noted “a significant acceleration of housing prices in Seoul and its surrounding areas, (as well).”
The Central Bank reduced the rates at the last policy meeting in May at a time when the country was in the midst of political upheavals as well as encountered
While South Korea’s economy declined by 0.2% of the quarter in the quarter of the first three months of this year amid softening growth and weak construction activity, the bank decided to keep stable rates, preferring financial stability compared to growth problems.
The side said that it is very important to evaluate the effect of macro -political, given the risks of the risks associated with the housing market in Seoul and the growth of household debt, as well as “remaining careful about the possibility of increased volatility in the foreign exchange market.”
Last week, Goldman said recent housing market developments have increased concern about financial stability, adding that in May the growth of loan in households increased to 6 trillion. (4.27 billion dollars) – the fastest rate since last October – and estimated 7 trillion. Won in June.
“The housing market in Seoul and its surrounding areas, which previously revealed the signs of overheating, seems to have stabilized several after the government debt measures,” the side reads.
However, the Central Bank is expected to reduce the rates in the next political meeting, since the housing market cooling measures come into force. Goldman said the introduction of new mortgage restrictions “open the door” to reduce the rate at the August meeting.
South Korea threatens economic wind because US President Donald Trump has threatened to impose 25% tariffs for all South Korean imports since 1 August, when the country does not reach a trade transaction with Washington.
South Korea Kospi increased by 0.74%, while the reinforced reinforced slightly to trade by 1372.48 against the dollar.
High debt from housing
South Korea’s debt plays a major role in the Central Bank’s CONDERATION POLICY, Out of the unique country rental system.
Unlike most rental systems worldwide, South Korean tenants pay a deposit known as “Jeonse” or “key money” rather than a monthly lease.
Jeonse is a deposit about 50% -80% of the market value. At the end of the lease, the deposit returns to the tenant. For the Landlord Jeonse is a free loan they can invest.
However, tenants tend to take a loan for financing the Jecept deposit, which causes a “high load and excessive debt in the housing system,” said Samuel Ray, co-founder, chairman and chief director of the Wealth Endowus investment platform.
Jeongwoo Park, economist Nomura in South Korea and Taiwan, told CNBC earlier that Bok was concerned about the negative long -term effects of higher domestic growth.
“The side believes that () a greater burden on the debt has weakened the cost of households. At the same time, the strong demand that is funded by housing () led to a distorted distribution of capital across the economy, which led to greater distribution of capital to unproductive sectors.”
