Rate hikes fail to cool Korea's housing expectations, mortgage demand
Two consecutive interest rate hikes by the Bank of Korea (BOK) have done little to cool expectations that home prices will keep rising, defying the usual pattern where higher borrowing costs weigh on the housing market, industry officials said Monday. The central bank raised its benchmark rate in July and August, each by a quarter percentage point, taking it to 3 percent. Yet its September…
The Bank of Korea's consecutive interest rate hikes have failed to temper expectations that South Korea's housing market will continue its upward trajectory, industry officials reported on Monday. Despite the central bank raising its benchmark interest rate by a quarter percentage point in both July and August, bringing it to 3%, a September consumer survey indicated that the housing price outlook index remained at 125, up from 120 in June.
The index above 100 suggests that more consumers anticipate home prices to increase rather than decrease.
The sentiment in Seoul was particularly high, with a housing price outlook index of 133. This resilience in housing price expectations, despite the recent rate hikes, is noteworthy, as mortgage rates have surged to near 8%. The latest rate increases were intended, in part, to cool the housing market. Bank of Korea Governor Shin Hyun-song acknowledged last month that the consecutive hikes were an "unusual move intended to send a strong signal."
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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