S Korea delays announcing policies to vitalize property market

17:06, July 21, 2010      

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The South Korean government on Wednesday said it will delay its planned announcement of measures to vitalize the nation's sluggish property market, as related ministries could not narrow gaps in their views.

"After having broad discussions on the current real property market policies, such as the debt-to-income policies and tax measures, we concluded that there needs more reviews on the effect of their effects," Minister of Land, Transport and Maritime Affairs Chung Jong-hwan told reporters in a press briefing after holding a unscheduled meeting with relevant policymakers.

The Wednesday meeting was held among heads of four related government agencies, the Ministry of Strategy and Finance, the Ministry of Land, Transport and Maritime Affairs, the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS), who there shared views on measures to boost the sluggish real property sector.

As a result of the meeting, the policy announcement originally slated for Thursday will be further delayed, according to the minister.

The meeting was wide expected to draw up loosened regulations on home-backed lending as market participants have been worried a decrease in trading volume and prices in the real property market.

Last year, South Korea's financial watchdog tightened its control on the real property market, lowering the debt-to-income (DTI) ratio, which regulates the amount of home-backed loans according to the borrowers' annual income.

While it was discussed that the ratio should be revised up in a bid to revitalize the market, the Finance Ministry and financial regulators are firmly sticking to its position that it should be kept as it is.



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