Housing prices unlikely to soar any time soon: report

SEOUL, Feb. 10 (Yonhap) -- Housing prices in South Korea are unlikely to rise sharply in the near future thanks to government measures aimed at curbing property speculation, a private report said Wednesday.

The tightened regulations on financing for home buyers and a slowdown in
liquidity growth will force the local housing market to put a crimp on a possible
housing bubble, said the report by the Korea Chamber of Commerce and Industry.
The South Korean government toughened a set of measures, including the
loan-to-value ratio (LTV) and the debt-to-income ratio (DTI), to fend off housing
market turbulence in October of last year when local housing prices showed signs
of instability. The move has caused the local housing market to slow down over
the past four months.
The LTV ratio measures a homeowner's outstanding debt on a property to the market
value of that property, while the DTI ratio measures the percentage of monthly
gross income that goes toward paying debts.
South Korea maintains an LTV of 60 percent and a DTI of 55 percent at maximum in
Seoul.
Housing prices will also be limited by the delayed recovery of the real economy
and the government's policy of increasing the supply of new homes, the chamber
predicted.
jia@yna.co.kr
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