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Excessive liquidity could fuel rise in housing prices: finance minister

Economy 17:55 June 15, 2020

SEJONG, June 15 (Yonhap) -- South Korea's finance minister said Monday that excessive liquidity could fuel a rise in property prices and the government is closely monitoring the housing market.

South Korea has promised to spend some 270 trillion won (US$225 billion) to cushion the economic blow from the coronavirus pandemic, with the Bank of Korea (BOK) cutting its key rate to a historic low.

Due to the concerns over rising prices related to excessive liquidity, the government is monitoring the property market, Hong told a meeting with senior ministry officials.

Hong also instructed ministry officials to review measures that could channel such liquidity into infrastructure projects.

Finance Minister Hong Nam-ki speaks during a meeting with senior ministry officials on June 15, 2020, in this photo provided by the ministry. (PHOTO NOT FOR SALE) (Yonhap)

Housing prices have been rising in recent years, spurring policymakers to unveil a series of measures, including tightened home-backed loan regulations and higher taxes.

Home transactions in South Korea sank more than 30 percent in April from the prior month due to tougher property rules and the coronavirus impact, according to government data.

The number of homes changing hands nationwide stood at 73,531 last month, down 32.3 percent from the previous month, the data showed.

However, the figure was up roughly 29 percent from the same month a year earlier, when housing transactions were anemic.

The on-month tumble was attributed to tough government measures to cool the housing market and the coronavirus outbreak that discouraged people from moving.

kdh@yna.co.kr
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