Housing Prices in S. Korea Unlikely to Tumble: Report

Housing prices in South Korea are unlikely to plunge or remain in a protracted slump due to still stringent regulations on home-backed loans and higher potential housing demand, a report said Wednesday.

"There are slim chances for housing prices to nose-dive as the government already put a series of loan regulations in place before the global financial crisis in late 2008, which will help prevent a sharp drop in housing prices," said the report compiled by the Samsung Economic Research Institute.

The report said there are speculations that housing prices will fall further due to lack of demand for housing, but a large number of potential home buyers will buttress up housing prices.

In August of this year, the country eased 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.

The number of homes sold dropped 7.3 percent from a year earlier in the first seven months of 2010, and the number of transactions in July was the lowest since February 2009, according to statistics compiled by the land ministry.

The South Korean government is seeking a way to prevent the property market from cooling and denting the weak recovery in consumer spending without sparking a housing price bubble and a mortgage borrowing frenzy.

[English News Team]