South Korea took steps on Sunday to boost languid home transactions, but the measures fell short of market expectations as policymakers were keen to keep in check the country's already heavy consumer debts.
Low income earners buying homes will be allowed to borrow more than they can under existing regulations and the exemption of punitive sales taxes for multiple home owners will be extended beyond the end-2010 deadline.
Analysts said the steps fell short of market expectations, reflecting the government's concern that a fast rebound in the property market could sharply raise household debts and eventually undermine the financial stability.
"The government has drawn up measures aimed at relieving those trading homes for dwelling purposes of difficulties while ensuring house prices will maintain their current stability," Land, Transport and Maritime Affairs Minister Chung Jong-hwan told a news conference.
He was speaking on behalf of the ministry and three other government agencies that announced the measures in a joint statement.
"The measures appear softer than what we and media had expected, and that reflects the government's intention of putting the brakes on the declining activity in home transactions," said Lee Sang-jae, chief economist at Hyundai Securities.
"I don't think these measures will have any lasting effect in terms of house prices or share prices of builders."
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