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Housing prices to further stabilize on monetary tightening: finance minister

This photo, taken Sunday, shows apartment buildings in Seoul. (Yonhap)
This photo, taken Sunday, shows apartment buildings in Seoul. (Yonhap)
Housing prices are expected to further stabilize due largely to the central bank's rate hikes and the Federal Reserve's push for faster monetary tightening, Finance Minister Hong Nam-ki said Wednesday.

Hong also voiced concerns that home prices in some regions could show signs of unstable movements due to presidential election candidates' campaign pledges on large-scale development.

"Housing prices have recently stabilized," Hong said at a government meeting on the housing market.

He said the stabilizing momentum in the housing market is expected to be maintained amid monetary tightening moves by the Bank of Korea (BOK) and the Fed.

Prices of apartment transactions in Seoul declined 0.79 percent in November from the previous month, marking the first fall in 19 months, according to data from the Korea Real Estate Board. In December, the downward trend is presumed to have continued.

The BOK on Friday raised the key interest rate by a quarter percentage point to 1.25 percent. It marked the third rate increase since the BOK made its first pandemic-era rate hike in August last year.

At its latest policy meeting, the Fed signaled hikes in the federal funds rates at a faster pace, with market players penciling in four rounds of rate increases this year.

Hong has warned of a potential fall in housing prices, saying excessive demand for homebuying could decline, affected by the BOK's rate hikes and tighter lending rules.

Meanwhile, Hong said the government will keep close tabs on the housing market as home prices in some regions could be swayed by presidential election candidates' pledges ahead of the March vote.

"With grave concerns, the government will closely monitor any unusual movements in the housing market," he added. (Yonhap)
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