00:02You're listening to AI Prism from Seoul Economic Daily.
00:06The ruling party wants to raise the tax break threshold for unsold regional apartments from
00:11600 million to 700 million won. Korea's project financing weak links, savings banks, insurers,
00:19and card companies are all facing new rate-driven stress at once. The ruling party is also proposing
00:25to extend a residency exemption for buyers in land permit zones and let them keep existing
00:31tenants longer. And U.S. 10-year Treasury yields just broke through the psychologically important
00:375% level. It's Wednesday, September 16th. Let's look at what's happening in Korea's property market.
00:45Korea's regional unsold housing crisis keeps worsening, even with existing tax breaks in
00:50place, as Middle East conflict-driven construction costs push more apartments above the current
00:56exemption threshold. Meanwhile, rate-sensitive project financing and secondary financial institutions
01:02are all facing fresh stress as market rates climb. And land permit zone rules are running into friction
01:08with new capital gains, tax policy meant to encourage more sellers into the market.
01:14Here's what the numbers show.
01:16Nationwide completed but unsold housing rose 1.1% to 29,152 units in July, with 84.8%
01:26concentrated outside the Seoul metro area, prompting a bill to raise the regional tax break price
01:32threshold from $600 million to $700 million won. Five major banks' fixed-rate mortgage rates
01:39rose to 4.89% to 7.29%, up 0.12% to 0.17% in under three weeks,
01:48as the five-year financial bond rate
01:50hit a yearly high of 4.578%. Long-overdue project financing loans held by securities and capital firms
01:58reached $13.1 trillion won, or 26% of the $50 trillion won total under review, mostly in high-risk
02:06sites
02:06now less likely to recover as rates rise. The ruling party proposed extending a residency
02:12obligation exemption for land permit zone buyers through next year and allowing lease renewals
02:18to count toward it, aiming to unlock more listings as the government's non-resident tax hike takes
02:23effect. The U.S. 10-year Treasury yield hit 5.039% intraday, its highest since July 2007,
02:31as Fed rate hike odds for this week's meeting rose to 94.5%, with a simultaneous Bank of Japan
02:39hike also expected. So what does this mean for buyers weighing a purchase this year?
02:45Earlier, we said five major banks' fixed mortgage rates just climbed sharply in under three weeks.
02:51Here's what that actually means for you. With U.S. Treasury yields now above 5% and a Fed hike
02:57expected imminently, Korean mortgage rates have real room to keep rising toward 8% at the upper end,
03:03so locking in a rate now costs less than waiting. If you're a landlord or tenant navigating a land
03:10permit zone, the proposed residency exemption extension is worth watching closely. It directly
03:16affects whether existing tenants can stay through their renewed lease. What to watch?
03:21Whether the National Assembly passes the regional, unsold housing tax break expansion this month.
03:27This week's Fed and Bank of Japan rate decisions. Both expected to raise rates simultaneously for the
03:34first time in 20 years. And whether project financing distress at securities and capital firms
03:39spreads further as rates keep climbing. That's today's AI Prism. Real Estate. This episode was
03:46produced with AI assistance based on sole Economic Daily Reporting and reviewed by a human editor.
03:53AI Prism is a Wanafra award-winning series. We'll be back tomorrow.
03:57You've been listening to AI Prism from sole Economic Daily.
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