Korea’s domestic market is the hottest on the planet as rising prices lead

Korea saw the fastest rising house prices in the third quarter, according to Knight Frank on Saturday. Seoul’s apartment complexes and houses are seen in this photo taken on Sunday in Namsan, central Seoul. [YONHAP]

Korea saw the fastest rising house prices in the third quarter, according to Knight Frank.

The British property consultancy said residential property prices in the country jumped 23.9% in the July-September period from the same period a year earlier, the biggest jump among the 56 countries in the company’s World House Price Index.

Korea was followed by Sweden, where third-quarter house prices rose 17.8% year on year, New Zealand 17% and Turkey 15.9%.

These growth rates were in real terms, so they are adjusted for inflation.

Turkey recorded the highest annual growth rate of prices in nominal terms, 35.5%, a figure that does not take into account the country’s inflation rate, which was 19.3% in the third quarter.

Korea’s nominal price increase rate was 26.4%, second only to Turkey. Korea’s year-on-year nominal price rise was 5.8 percent in the first quarter of this year and 6.8 percent in the second quarter.

House prices are rising around the world, with the value of an average home rising 9.4% year-on-year in the third quarter. This is more than the 9.2% annual growth recorded in the second quarter.

Of the 56 countries, all reported higher house prices except Malaysia and Morocco, and in 48% of the countries prices increased by 10% or more. This percentage was only 13% in the first quarter of 2020, at the start of the Covid-19 pandemic.

The third quarter may have been the peak for some countries, according to the report. Eighteen countries, including New Zealand, the United States and the United Kingdom, recorded lower nominal rates of increase in the third quarter compared to the previous quarter.

“Here, interest rate hikes, property tax changes and affordability issues are contributing to slow growth rates,” the report says, but it notes that price increases are still expected to continue.

“The real estate boom we’ve seen around the world is expected to continue into 2022, Omicron and new variants permitting,” the report said.

BY LEE SEUNG-HO, YOON SO-YEON [[email protected]]