South Korea's Housing Market Growing Stronger
<span style="font-weight: 400;">South Korea’s housing market is strengthening after several years of lacklustre performance. House prices rose by 4.73% during the year to Q3 2020, sharply up from the previous year’s 0.83% growth and its highest growth in 13 years. During the latest quarter, house pr
Published -
Dec 30, 2020 4:34 AM
South Korea’s housing market is strengthening after several years of lacklustre performance. House prices rose by 4.73% during the year to Q3 2020, sharply up from the previous year’s 0.83% growth and its highest growth in 13 years. During the latest quarter, house prices increased 1.57% from the previous quarter. Elected on the promise of ending cosy ties between business and government, South Korea’s current government launched a fiscal plan that President Moon Jae-in called ‘a complete paradigm shift’ based on US$9.85 billion 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 pays 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.