BIS "Han House Price Increase Rate 2.5%... Asia Major Countries 1st Place"

Bank for International Settlements, Q2 Real House Price Index Growth Rate
South Korea House Price Growth 2.5%...Global Average 1.9%

Quarterly Real Housing (Residential Real Estate) Price Change Rate Trends
*Source: Bank for International Settlements (BIS)

[Asia Economy Reporter Eunbyeol Kim] South Korea's real housing price growth rate in the second quarter jumped 2.5% compared to last year, far surpassing the global average growth rate of 1.9%. Among major Asian countries, it recorded the highest growth rate. While asset prices rose worldwide as countries injected money to respond to the COVID-19 pandemic, South Korea's housing price growth rate was notably higher.

According to the Bank for International Settlements (BIS) on the 2nd, South Korea's real housing (residential real estate) price index was 108.3, up 2.5% from 105.6 in the second quarter of last year. South Korea showed a particularly high housing price growth rate among major Asian countries. According to BIS, South Korea's real housing price growth rate in the second quarter was the highest among major Asian countries and was the only one with positive growth. China recorded a housing price growth rate of -0.57% in the second quarter, Japan -0.6%, and Indonesia -0.61%. India recorded -3.52%, and Hong Kong -4.07%, showing a significant decline in housing prices. In the second quarter of last year alone, China's housing price growth rate was 4.47%, dominating the Asian region, while South Korea's growth rate was around 1.19%. This means the growth rate more than doubled in one year. However, BIS excluded countries such as Thailand and the Philippines from the Asian country comparison.

Since the 2008 financial crisis, housing prices in China, India, and other countries have risen sharply based on low interest rates and rapid growth. However, recently, due to the COVID-19 crisis, real estate transactions have not been active, causing prices to fall. On the other hand, South Korea showed a high housing price growth rate due to abundant liquidity combined with government real estate policies.

However, compared to the advanced country group, South Korea's housing price growth rate is relatively low. The average housing price growth rate in advanced countries in the second quarter was 3.7%. Australia had the highest at 6.60%, followed by Canada (5.90%), the Euro area (4.88%), and the United States (4.19%). BIS explained, "Following the COVID-19 pandemic, fiscal and monetary policies have led to a phenomenon of rising housing prices."