Korea's land prices grow despite cut in transactions in 2016

Published : Jan 25, 2017 - 11:16 Updated : Jan 25, 2017 - 11:16

South Korea's land prices continued to increase from a year earlier in 2016, also growing at the fastest rate in nine years, the government said Wednesday.

Land prices increased 2.7 percent in 2016 from a year earlier, accelerating from a 2.4 percent on-year gain in 2015 and marking the fastest rise since a 3.89 on-year spike posted in 2007, according to the Ministry of Land, Infrastructure and Transport.

(Yonhap)

The increase in land prices also far outpaced the 1 percent on-year gain in overall consumer prices.

The ministry also noted the country's land prices have been on a steady climb since November 2010.

Land prices rose in all 17 major cities and provinces throughout the nation, while price hikes in rural areas outpaced those in the capital region.

Land prices in rural areas gained 2.99 percent from a year earlier, while those in Seoul and its immediate surrounding areas advanced 2.53 percent on-year.

Such an increase in rural areas apparently followed a rise in new home constructions there.

In a separate report, the ministry said the number of construction permits issued for new homes in rural areas gained 7.9 percent from a year earlier in 2016. New home permits issued in the capital area plunged 16.5 percent on-year.

By region, land prices on the southern resort island of Jeju showed the steepest rise of 8.33 percent in land prices last year, followed by the administrative city of Sejong with 4.78 percent.

Land transactions, on the other hand, slipped 3 percent on-year.

"Land prices appear to have gone up last year on increased investment caused by low interest rates. However, land transactions dropped slightly due to a cut in home transactions, especially in rural areas," the ministry said.

The ministry earlier said the country's overall home transactions tumbled 11.8 percent on-year in 2016, with those in rural areas plunging 16.7 percent. (Yonhap)