Housing prices in Seoul spiked over 19% in June on an annualized basis, prompting financial authorities to address rapidly expanding household loans.Housing prices in Seoul spiked over 19% in June on an annualized basis, prompting financial authorities to address rapidly expanding household loans.
South Korea’s central bank held its policy rate at 2.5%, keeping it steady at an almost three-year low.
South Korea’s economy contracted by 0.2% quarter on quarter in the first three months of this year due to weak construction activity and softening export growth, while it remained flat on an year on year basis.
South Korea’s Kospi
Goldman Sachs in a note last week said that introduction of new mortgage lending restrictions would “open the door” for a rate cut in August.
Housing prices in Seoul have spiked over 19% in June on an annualized basis, according to Goldman, prompting financial authorities to step in with measures to address rapidly expanding household loans.
The firm said that recent housing market developments had heightened the BOK’s concerns about financial stability, noting that household loan growth surged to 6 trillion won ($4.27 billion) in May — the fastest pace since last October — and is estimated to have reached 7 trillion won in June.
The country is also faces the specter of further economic headwinds after U.S. President Donald Trump threatened to impose 25% tariffs on all South Korean imports in his first batch of “tariff letters.”
