With housing prices in Seoul showing clear signs of rebounding, the government is considering taking steps to rein in the overheated market.
Officials at the Ministry of Land, Infrastructure and Transport said Sunday that the ministry will intervene if housing prices in Seoul grow faster than expected on the basis of government projections.
According to the Korea Appraisal Board last Monday, Seoul apartment prices had increased 0.02 percent from a week before, ending a downward trend that went on for eight months since November, when the government’s real estate speculation countermeasures took effect.
Weekly fluctuations in housing prices are the standard used to determine whether there has been an excessive increase, the ministry said. If housing prices fluctuate by 0.3 percent or more week over week, the government considers stepping in.
“If the weekly fluctuation rate were to exceed 0.3 percent and keep increasing, the government would deem the market to have become overheated and take further measures,” said a senior official from the Transport Ministry.
A weekly increase of 0.3 percent, if it continues, adds up to a 15.6 percent increase over the course of a year. This means 1 billion won ($850,000) worth of real estate in Seoul would be worth more than 1.15 billion won a year later.
Last September, the government announced a series of measures to rein in soaring housing prices in Seoul, imposing additional taxes on owners of multiple homes. The measure decreased housing prices in Gangnam and other affluent areas of Seoul.
Meanwhile, more than half of real estate experts expected that housing prices in Seoul will increase within a year. According to a survey from the Korea Development Institute released Sunday, about 54 percent of 106 surveyed experts predicted a price hike.