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(LEAD) Home prices in greater Seoul area show signs of stabilizing: finance minister

All News 11:22 September 08, 2020

(ATTN: ADDS background in last 4 paras)

SEOUL, Sept. 8 (Yonhap) -- Home prices in Seoul and its neighboring area have shown signs of stabilizing due to the government's measures to cool prices and supply more homes, Finance Minister Hong Nam-ki said Tuesday.

"Market sentiment in the greater Seoul area, which had showed signs of overheating, appeared to have become calm in August," Hong said.

Last month apartment prices in Seoul largely remained flat, Hong said, citing industry data.

Finance Minister Hong Nam-ki (R) speaks at a meeting with economy-related ministers on Sept. 8, 2020. (Yonhap)

Apartment prices in Seoul rose 0.01 percent in the final two weeks of August, compared with a gain of 0.04 percent in the first week of last month, Hong said.

In particular, apartment prices in Seoul's Gangnam Ward remained flat last month, Hong said.

In July, the government announced its toughest measures yet to rein in rising housing prices, as a series of steps, including tax hikes and loan regulations, failed to put the brakes on soaring home prices.

The following month, the government announced it will supply 132,000 homes, including 110,000 homes in Seoul, in the capital city and neighboring areas by 2028 by easing restrictions on the construction of residential buildings.

As part of the supply measure, the government will start selling 30,000 public units in 2021 and another 30,000 homes in 2022 in the greater Seoul area, Hong said.

The eased rules allow redevelopment of aging apartment complexes to increase their floor area ratio (FAR) to between 300 and 500 percent from the current 250 percent in order to build more units.

FAR is the ratio of the total plot area to the overall building area and is determined by the size of the plot and width of the road in front of the plot.

The rules also allow such redevelopment projects to build 50-story apartment buildings in the greater Seoul area, far higher than the existing 35-story height cap.

The plans are in line with the government's broad plan to supply a total of 1.27 million homes in Seoul and neighboring areas as early as 2028.


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