Home transactions plunge 42.5% in Nov. on lending curbs

Apartment buildings in Seoul / Yonhap

Home transactions in South Korea tumbled nearly 43 percent year-on-year in November amid lending curbs and rising interest rates, government data showed Tuesday.

The number of homes changing hands nationwide stood at 67,159, down 42.5 percent from a year earlier, according to the data from the Ministry of Land, Infrastructure and Transport.

Compared with the previous month, the November tally was down 10.8 percent.

The number of home transactions in the greater Seoul area, which includes the western port city of Incheon and the surrounding Gyeonggi Province, shrank 35.9 percent, with those in the rest of the country plunging 46.1 percent.

The nosedive came amid tighter restrictions on mortgages and rising lending rates in the wake of the central bank hiking its benchmark interest rate.

In a bid to curb rising home prices and household debt, the government has made it harder for homebuyers to take out mortgages. In November, the Bank of Korea raised its key rate by 0.25 percentage points to 1 percent to help tame inflation and household debt.

The ministry, meanwhile, said the country's new home permits climbed 24.2 percent year-on-year to 448,092 in the first 11 months of 2021.

New construction permits in the capital area rose 18.7 percent, while those in the rest of the country surged 30.4 percent, and in Seoul, 54.6 percent.

By type, construction permits for new apartments jumped 28.4 percent, and those for other types of housing, such as row and detached houses, went up 12.8 percent.

Groundbreaking for new homes swelled 19.5 percent year-on-year to 501,878 in the January-November period, the ministry added. (Yonhap)