DEMAND DROPS FOR BUYING HOMES

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Last week the government eased some of the financial regulations including home mortgages on properties costing more than 1.5 billion won. However, few people are willing to buy homes these days, as interest rates on home loans are soaring and apartment prices are expected to plummet further.

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A large apartment complex of 9,500 households in Songpa-gu District, Seoul. Last month an 84 sq.m. unit here was sold for one billion 785 million won. That's more than 400 million won down from the price three months ago. Even the apartments put up for sale cheaper than in early 2020, when home prices started skyrocketing, are not selling these days.

[Soundbite] Kim Min-young(Realtor) : "Those willing to buy homes only inquire when prices go down to the level of urgent sale. They want to slash prices as much as possible."

The situation is similar with apartment complexes subject to rebuilding in Gangnam, which remained high on expectations of deregulation. An apartment complex in Jamsil, Seoul, also subject to rebuilding, recorded the highest price of 2.87 billion won a year ago, but lately its units are available for 2.1 billion, down more than 700 million won.

[Soundbite] (Realtor(VOICE MODIFIED)) : "The land transaction permission zones should be abolished. What's the point in easing regulations on home loans when interest rates are so high."

Last week the government laid out measures to ease financial regulations to help improve the real estate market, but few people are willing to buy homes nowadays. Apartment prices in Seoul have declined for 23 consecutive weeks, and the decrease in price keeps widening. In September only 614 apartments were sold in the nation's capital, a fifth of the figure recorded a year ago.

[Soundbite] Kim Sung-hwan(Construction & Economy Research Institute) : "Since interest rates are so high, it's difficult to enter the market anew and buy homes."

The Construction Economy Research Institute of Korea predicts housing prices nationwide will plunge even more next year by about 2.5 percent.