ID :
77204
Thu, 08/27/2009 - 11:21
Auther :
Shortlink :
https://www.oananews.org//node/77204
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S. Korea's housing price gains in line with fundamentals: IMF report
By Lee Joon-seung
SEOUL, Aug. 27 (Yonhap) -- South Korea's recent housing price gains are not significantly out of line with economic fundamentals, the government said Thursday, citing a report by the International Monetary Fund (IMF).
The Ministry of Strategy and Finance said the IMF's annual report released last
week showed that while local housing prices have soared since the 1997-1998 Asian
financial crisis, the trend cannot be considered an abnormal hike.
The announcement comes as policymakers have received flak for failing to curb the
sharp rise in prices that have made it hard for average income earning households
to own their own homes.
The IMF's findings claim that on average home prices in South Korea rose 25
percent since 1999, which is slower than the average of 31 percent for the entire
Asia Pacific region. It said the run-up in prices nationwide was driven by the
capital Seoul, where prices have risen 60 percent vis-a-vis 1999, well above
increases reported for other metropolitan areas such as Singapore and Hong Kong.
"The IMF stated that taking key factors into account, South Korea's housing
prices are on average broadly in line with fundamentals," an official said.
The IMF reached its conclusion by considering growth in disposable income,
interest rates, equity price growth and the size of the working-age population.
On the downside, the agency cautioned that the current economic slowdown is
restraining prices as incomes shrink and banks tighten credit standards. The
spillovers from the current slowdown are causing the number of unsold homes to
rise while resulting in a steep decline in new construction orders.
The IMF report, meanwhile, said that South Korea's current foreign reserves of
US$232 billion are more than adequate to deal with its external debt, adding
there is no risk of the country falling into default.
yonngong@yna.co.kr
(END)
SEOUL, Aug. 27 (Yonhap) -- South Korea's recent housing price gains are not significantly out of line with economic fundamentals, the government said Thursday, citing a report by the International Monetary Fund (IMF).
The Ministry of Strategy and Finance said the IMF's annual report released last
week showed that while local housing prices have soared since the 1997-1998 Asian
financial crisis, the trend cannot be considered an abnormal hike.
The announcement comes as policymakers have received flak for failing to curb the
sharp rise in prices that have made it hard for average income earning households
to own their own homes.
The IMF's findings claim that on average home prices in South Korea rose 25
percent since 1999, which is slower than the average of 31 percent for the entire
Asia Pacific region. It said the run-up in prices nationwide was driven by the
capital Seoul, where prices have risen 60 percent vis-a-vis 1999, well above
increases reported for other metropolitan areas such as Singapore and Hong Kong.
"The IMF stated that taking key factors into account, South Korea's housing
prices are on average broadly in line with fundamentals," an official said.
The IMF reached its conclusion by considering growth in disposable income,
interest rates, equity price growth and the size of the working-age population.
On the downside, the agency cautioned that the current economic slowdown is
restraining prices as incomes shrink and banks tighten credit standards. The
spillovers from the current slowdown are causing the number of unsold homes to
rise while resulting in a steep decline in new construction orders.
The IMF report, meanwhile, said that South Korea's current foreign reserves of
US$232 billion are more than adequate to deal with its external debt, adding
there is no risk of the country falling into default.
yonngong@yna.co.kr
(END)
