Trend: house prices fell 1.10% y-o-y in Q2 2017
South Korea´s housing market is slowing, after two years of increasing house prices, and very severe anti-speculative measures are being introduced. Prices rose by 0.50% q-o-q during the latest quarter.
Analysis: housing restraint, economic stimulus ahead.
Elected on the promise of ending cosy ties between business and government, South Korea's new government has launched a fiscal plan that President Moon Jae-in has called 'a complete paradigm shift' based on $9.85 bn extra spending, especially on social security, health, and small businesses, which will raise growth to 3%.
High housing costs are a political issue, so the government is targeting the "overheated speculative zone", comprised of the capital Seoul (all 25 districts) and two other areas -- Gwacheon and Sejong City. For those areas they've re-introduced increased capital gains tax (CGT) on property investors, originally introduced 2005-2014.
Investors who own two houses will pay an extra 10% in capital gains tax upon the sale of a property. Three-house owners can expect an extra 20% tax, in addition to baseline CGT of between 6-40%, depending on the size of the gain and the holding period.
Rents, rental yields: data unavailable in S. Korea
Recent news. GDP growth was 2.70% y-o-y in Q2 2017. Korean exports are expected to jump 10.2% this year, with domestic consumption up 2%.