South Korea, caught between a sagging economy and a feared property bubble, yesterday announced new measures aimed at reining in soaring home prices while keeping its key interest rate unchanged.
The government yesterday revived a price ceiling system for newly built apartments, requiring construction firms to reveal their building costs.
The price cap system was removed in 1999 when South Korea was struggling to escape from the Asian financial crisis.
Construction companies have since taken advantage and jacked up selling prices for new homes to almost double actual building costs while both speculative and underlying demand have added to the upward pressure.
"The government measures are aimed at enhancing transparency in home prices," Minister of Finance and Economy Kwon O-kyu said at a press conference.
"This will help drive down new home prices by more than 20 percent," the top economic policy maker said.
Aside from the revival of a price cap system, the government will also push to build 1 million homes by 2012, with 56,000 planned for Seoul and its surrounding areas this year alone.
Kim Kwang-suk at Speedbank, a property consulting agency, said the new measures will have a strong impact in terms of reining in the property boom which saw prices in Seoul alone rise 19 percent last year.
The boom is one of the downsides of a policy of keeping interest rates low to bolster the slowing economy, allowing easy finance.
"The new move is aimed at curbing the prices of new homes as past policies were focused on restraining speculative demand through higher taxes or increasing the supply of new apartments," Kim said.
Earlier yesterday, the Bank of Korea said it was keeping its call rate target for January unchanged at 4.5 percent despite demands for a hike in order to head off a property bubble stoked by easy loans.
Largely expected, the decision marked the fifth consecutive month the central bank has kept the call rate target on hold after a surprise 25 basis points increase last August to 4.5 percent, the highest since August 2001.
"The economy maintains its growth momentum of a moderate degree, even if domestic consumption somewhat weakened," central bank governor Lee Seong-tae said.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS