Minister of Land says housing prices are stabilizing

Minister of Land, Infrastructure and Transport Noh Hyeong-wook said on Wednesday that housing prices are certainly showing signs of stability, highlighting that housing prices are at their highest peak, and warned that people should avoid being house poor by exercising caution against excessive borrowing to buy houses.

“The number of homes available for sale is increasing, but home sales are showing downward trend,” Minister Noh said at “Kim Hyun-jeong’s News Show,” a radio program at CBS Radio. He further emphasized that objective housing market indices indicate that housing prices have entered into a stabilizing phase. The minister’s analysis appears to be grounded on the Korea Real Estate Board’s survey results that the increase in apartment sales in Seoul has been slowing down for 12 consecutive weeks, along with KB Financial Group Inc.’s supply and demand index for apartment sales in Seoul that reached its bottom in two years and five months.

“We tend to quickly fall into oblivion when it comes to the past. However, we should remember that housing prices spiked back in just 2006 and 2007 and cooled down afterward, giving rise to the house poor and rent poor (tenants struggling to pay rents) in 2012 and 2013,” said Minister Noh. “The apartment prices in Gangnam went down by 40% at the time compared to 2010. People should think twice before taking out excessive mortgages to buy homes.”


Ho-Kyeong Kim kimhk@donga.com