S.Korea to boost Seoul housing stock by 10% to calm buying frenzy

South Korea on Thursday said it would significantly ramp up construction of new houses across the country to tackle surging home prices, a plan that would increase the number of Seoul dwellings by 10%. The Moon Jae-in government said it will add 830,000 new homes by 2025 across the country, 320,000 of which will be in Seoul. The measure is the 25th by the left-leaning Moon administration to slow soaring home prices and comes as both sales and rental prices surge despite tighter mortgage curbs and heavier real estate taxes.

The move suggests the policy focus is shifting to boosting supply after efforts to discourage demand through loan curbs and taxes failed to calm the market. Stocks of Korean building companies rose with concrete parts maker Tongyang Pile up 8.61% while Ssangyong Cement Industry rose 2%.

The runaway home prices have wiped out a surge in President Moon's approval ratings from the handling of the coronavirus pandemic, and are biting on his party's support ahead of April elections to pick the mayors of the two largest cities, Seoul and Busan. President Moon's Democratic Party is fighting to retain the mayor's offices as the main opposition conservatives pick up momentum with criticism of his failures to deliver on his economic policy pledges.

"Stabilising the real estate market is a top priority, not just because we need to stabilize asset prices but also for housing welfare, to address income inequality and keep workers motivated and society stable," finance minister Hong Nam-ki said in a policy meeting. The median apartment price in Seoul surged to 1.04 billion won ($952,172) as of January, up about 70% since Moon took office in 2017.

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