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Home prices rise at fastest rate in 9 years in 2020

The photo shows apartment complexes in Seoul on July 28. (Yonhap)
The photo shows apartment complexes in Seoul on July 28. (Yonhap)
Home prices in South Korea rose at the fastest pace in nine years in 2020 despite a set of government measures to rein them in, data showed Tuesday.

Housing prices in Asia's fourth-largest economy gained 5.36 percent last year from a year earlier amid low interest rates and ample market liquidity, according to the data from the Korea Real Estate Board.

It represents the steepest on-year increase since the 6.14 percent hike recorded in 2011.

Home prices in the South Korean capital of Seoul expanded 2.67 percent in 2020 from the prior year, the largest growth rate since the 6.22 percent spike in 2018.

In the greater Seoul area that houses half of the country's 51-million population, housing prices went up 6.49 percent last year from the previous year.

By type, apartment prices soared 7.57 percent in 2020 from the previous year, the fastest clip in nine years. Prices of detached and row houses added 2.5 percent and 1.16 percent, respectively.

Meanwhile, jeonse rates in the country increased 4.61 percent on-year in 2020, the highest annualized growth rate in five years.

The sharp gain came amid rising demand for jeonse homes following government measures to curb soaring home prices. The situation worsened in the second half of last year as three controversial laws on housing leases took effect in late July to help stabilize soaring housing prices by better protecting the rights of tenants.

Jeonse is a home rental system unique to South Korea in which tenants pay a large sum of money as a deposit instead of paying monthly fees.

Defying government efforts to stabilize the property market, housing prices and rent have been rising sharply in the Seoul metropolitan area, fanning public discontent with the Moon Jae-in administration. (Yonhap)