South Korean house prices recorded the biggest decline in nine years as the Bank of Korea’s 16-month tightening cycle weighs on the property market, adding to credit concerns for policymakers.
Nationwide home prices dropped 0.32 percent this month from a year earlier, while Seoul slid 0.12 percent, data from Kookmin Bank showed.
South Korean surveyors tend to count the price changes of traded homes against the total value of wider groups, which can result in markedly smaller incremental changes.
The deteriorating outlook is a priority for policymakers as they try to avert a hard landing in the housing market. Property is a key driver of the country’s record-high household debt, and several construction firms are also struggling.
South Korean Minister of Finance Choo Kyung-ho and Bank of Korea Governor Rhee Chang-yong yesterday announced a fresh set of steps to support the housing market. They are seeking to ease credit strains that continue after the developer of a local theme park missed a debt payment earlier this year.
Forward indicators suggest the housing market correction is likely to deepen. The outlook for nationwide property prices slid further to 59 in a Kookmin Bank survey that sets 100 as the dividing line between optimism and pessimism.
The Bank of Korea is forecast to raise its key interest rate at least once more to try to tame inflationary pressure. The benchmark has risen by 2.75 percentage points since August last year.
South Korea is continuing with efforts to ease strains in its credit market, with local financial firms making a second round of contributions to a key bond stabilization fund redeployed last month.
The companies would inject an additional 5 trillion won (US$3.7 billion) into the fund next month through January, the South Korean Ministry of Economy and Finance said.
The Bank of Korea would provide as much as 2.5 trillion won of liquidity through repurchase agreement transactions to participating firms, Choo, Rhee and heads of financial regulators said at a joint press conference yesterday.
The move is part of an already-announced government aid program worth more than 50 trillion won to arrest the worst run-up in money market yields since the global financial crisis.
DOLLAR CHALLENGE: BRICS countries’ growing share of global GDP threatens the US dollar’s dominance, which some member states seek to displace for world trade US president-elect Donald Trump on Saturday threatened 100 percent tariffs against a bloc of nine nations if they act to undermine the US dollar. His threat was directed at countries in the so-called BRICS alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Turkey, Azerbaijan and Malaysia have applied to become members and several other countries have expressed interest in joining. While the US dollar is by far the most-used currency in global business and has survived past challenges to its preeminence, members of the alliance and other developing nations say they are fed
LIMITED MEASURES: The proposed restrictions on Chinese chip exports are weaker than previously considered, following lobbying by major US firms, sources said US President Joe Biden’s administration is weighing additional curbs on sales of semiconductor equipment and artificial intelligence (AI) memory chips to China that would escalate the US crackdown on Beijing’s tech ambitions, but stop short of some stricter measures previously considered, said sources familiar with the matter. The restrictions could be unveiled as soon as next week, said the sources, who emphasized that the timing and contours of the rules have changed several times, and that nothing is final until they are published. The measures follow months of deliberations by US officials, negotiations with allies in Japan and the Netherlands, and
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will
Intel Corp chief executive officer Pat Gelsinger has retired from the company and stepped down from its board of directors just as the company is in the middle of trying to execute a turnaround plan. Intel chief financial officer David Zinsner and Intel Products CEO Michelle Johnston Holthaus are serving as interim co-CEOs while the board searches for Gelsinger’s replacement, the company said in a statement. Frank Yeary, independent chair of the board of Intel, is to serve as interim executive chair, the company said. Gelsinger’s departure is hitting at a tumultuous time for the US chipmaker. Once the industry leader in
RSS