South Korea announced steps Thursday to bolster its sagging property market, including easing restrictions imposed on some districts of the capital.
Seoul in 2003 restricted mortgage loan-to-value ratios to 40 percent and banned buyers from spending more than 40 percent of their income on repayments in three southern Seoul areas seen as most attractive to speculators.
From now on, the same rules will apply citywide, with buyers able to borrow up to 50 percent of a property’s value and spend up to 50 percent of their income on repayments.
House prices in the Seoul metropolitan area have been falling for 10 successive months, with the latest April reading showing a 0.3 percent month-on-month decline.
The government said it would also cut taxes on capital gains from property in the three districts, and would offer low-interest loans to a wider range of potential home-buyers in the capital.
“We’re rolling back excessive regulations adopted back in the early 2000s when the property market was overheating,” the land ministry said in a statement.
“Despite an increase in home supply… transactions in the housing sector are shrinking, while new apartment sales are also sluggish, hit by (economic) uncertainties.”