South Korea's housing market is expected to slow down next year following a steep rise in recent years due to strengthened regulations and the rising likelihood of interest rate hikes in major economies, a central bank report showed Saturday.
South Korea's housing market has slowed over the past few months after the government released a raft of regulations on Aug. 2, including strengthened mortgage rules and taxes on multiple-home owners, to cool down the overheated market.
"Sales prices of apartments have stabilized since the Aug. 2 measures," the Bank of Korea (BOK) said in the recent economic outlook report.
"The upward trend is expected to slow next year because construction companies will expand supply, the major economies are set to raise interest rates and the government is showing strong willingness to stabilize the housing market."
Top mortgage lender KB Bank said the average house price inched up 0.08 percent in September from a month earlier.
Increased supply is also expected to affect housing prices as a growing number of apartments have newly opened in Seoul under redevelopment projects.
About 380,000 households are expected to enter new apartments across the nation this year, up 30 percent from a year ago, according to the data compiled by Budongsan 114.
The BOK kept policy unchanged on Thursday but upgraded its growth outlook to 3 percent, boosting expectations for an interest rate surge in coming months. (Yonhap)