Home prices across South Korea are directed southbound in the second half as landlords face multiple hikes in property-related taxes, a state-run think tank said.
Nationwide home median price is expected to edge down 0.3 percent in the second half against the previous six-month period, entering a correction after gains of 1.4 percent last year and 0.5 percent in the first half, according to the Korea Housing Institute (KHI) based on a poll on 109 home builders and 115 realtors across the country.
Amid a supply glut and business slowdown in large manufacturers, home prices in local provinces will likely fall 0.8 percent, extending 0.4 percent drop in the first half.
Excepting popular neighborhoods in Seoul, Bundang, and Gwacheon, overall home prices in and around Seoul also are likely to turn negative after a 1.5 percent growth in the first half, the institute said.
The government plans to propose raising the taxable base and the maximum rate of comprehensive real estate tax in the revised tax code for next year. Chilling in the real estate market - the sole positive activity in domestic demand - is expected to further weigh on the second-half economy.
By Chung Soon-woo and Cho Jeehyun
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]