South Korea will ease mortgage lending rules and extend tax breaks to encourage buyers back to the property market after home sales slumped to the lowest level in almost a year and a half.
Banks will be allowed to ease restrictions on mortgage loans for first-home buyers or owners of one home temporarily until the end of March, the government said yesterday in an e-mailed statement.
The waiver period for taxes on home trading will also be extended by two years until the end of 2012, according to the statement by the Ministry of Strategy and Finance, the Financial Services Commission and the Ministry of Land, Transport and Marine Affairs.
The government’s previous measures, announced in April, failed to spur property transactions, worsening construction companies’ finances.
The number of homes sold dropped 7.3 percent from a year earlier in the first seven months of this year, and the number of transactions last month was the lowest since February last year, according to statistics compiled by the land ministry.
“The measures will help those in the middle class or lower buy homes at a time when the housing prices are stabilizing,” the government said in the statement.
Banks can extend as much as 50 percent of a borrower’s annual income for purchases of homes in Seoul and 60 percent for areas outside the capital under the so-called debt-to-income limit.
That cap will be temporarily scrapped for buyers of homes in areas outside the so-called “speculative zones,” the government said.
“Raising a cap on mortgage loans will do little for people and companies when the central bank is raising interest rates,” said Kim Jae-eun, an economist at Hyundai Securities Co in Seoul.
“This is just sending inconsistent policy signals to the market,” Kim said.
The Bank of Korea increased its benchmark interest rate to 2.25 percent from a record-low 2 percent last month, and signaled more hikes.
The construction industry had its biggest contraction since at least 2008 in the second quarter, according to last month’s data from the Bank of Korea. Construction shrank 0.8 percent over the three months through June, the third drop in four quarters.
The decline contrasts with 1.5 percent growth in South Korea’s GDP.
Combined second-quarter profit at local lenders plunged 34 percent from a year earlier after they set aside extra loan-loss reserves to help construction and shipbuilding companies restructure debts, the Financial Supervisory Service said on Aug. 3.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
DEFENDING DEMOCRACY: Taiwan shares the same values as those that fought in WWII, and nations must unite to halt the expansion of a new authoritarian bloc, Lai said The government yesterday held a commemoration ceremony for Victory in Europe (V-E) Day, joining the rest of the world for the first time to mark the anniversary of the end of World War II in Europe. Taiwan honoring V-E Day signifies “our growing connections with the international community,” President William Lai (賴清德) said at a reception in Taipei on the 80th anniversary of V-E Day. One of the major lessons of World War II is that “authoritarianism and aggression lead only to slaughter, tragedy and greater inequality,” Lai said. Even more importantly, the war also taught people that “those who cherish peace cannot
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
RSS