South Korea’s housing market had its worst month since the 2008-2009 global financial crisis in August, as prices fell for a second straight month and an index measuring transactions dropped sharply, data from a big Korean bank showed.
On a month-to-month basis, housing prices across the country fell 0.1 percent in both August and July after holding steady the preceding two months, according to the Kookmin Bank data. The back-to-back losses were the first since February and March 2009.
On an annual basis, housing prices in August were just 1.9 percent higher, the data showed. That was the smallest increase since December 2010 and the ninth straight month of a declining year-on-year gain.
Kookmin, a unit of KB Financial Group Inc, is the country’s largest mortgage lender and its monthly housing market data is an influential indicator not only in the private sector but among government agencies.
A Kookmin index measuring transaction activity in the housing market fell to 4.1 in August from 4.7 in July. The last time the index was lower was for January 2009, when it was 3.9.
Government data released in recent days showed that Asia’s fourth-largest economy further lost momentum in August as demand weakened both from abroad and within the country, supporting the market’s view there’s a good chance for an interest rate cut as early as next week.
In July, the Bank of Korea surprisingly cut its policy interest rate for the first time in more than three years. The central bank has a meeting on September 13.