South Korea’s house prices suffer worst fall in nearly 19 years

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House prices in South Korea fell 1.98 percent in December from a month earlier, the fastest drop since data releases began in late 2003 and a seventh consecutive month of decline, data from the Korea Real Estate Board showed on Monday.

That follows a 1.37 percent loss in November and marked a 4.68 percent decline for 2022, turning around from a 9.93 percent gain in 2021, the board said in a statement.

House prices were falling sharply around the world as central banks quickly raised interest rates to fight inflation, cooling the economy and pushing up mortgage rates.

For the latest seven losing months, house prices across the country dropped by a cumulative 4.89 percent, also setting the steepest drop for any seven-month period on record, the data showed.

The government of President Yoon Suk-yeol, who took office in May last year, has announced measures aimed at lowering taxes and easing other restrictions, largely unwinding the steps taken by his predecessor.

Conservative Yoon has said that house prices had some room to ease after a runaway rally in recent years, but that any downward adjustment should be made in an orderly manner and without hurting stability in the financial sector.

House prices in South Korea had risen every month for nearly three years until May 2022, which analysts blamed on a combination of the loose monetary policy, a poor supply of new homes and a policy failure.