South Korea's president invokes dramatic Japan realty crash to push domestic property agenda
Economists told CNBC that the comparison with Japan overstates the immediate danger."I think the probability of a real asset bubble burst in Korea is limited," Kang Min Joo, senior economist for South Korea and Japan at ING, told CNBC. She said that mortgage lending conditions have been relatively tight for several years, and authorities have maintained strict controls on loan-to-valuation and debt-to-income ratios. "While the LTV ratio was previously as high as 80%, it has fallen to below 40% and lower in Seoul area." The household debt-to-GDP ratio in the country stands at 90.14 as of 2024.
- ▪Economists told CNBC that the comparison with Japan overstates the immediate danger."I think the probability of a real asset bubble burst in Korea is limited," Kang Min Joo, senior economist for South Korea and Japan at ING, told CNBC.
- ▪She said that mortgage lending conditions have been relatively tight for several years, and authorities have maintained strict controls on loan-to-valuation and debt-to-income ratios.
- ▪"While the LTV ratio was previously as high as 80%, it has fallen to below 40% and lower in Seoul area." The household debt-to-GDP ratio in the country stands at 90.14 as of 2024.
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Economists told CNBC that the comparison with Japan overstates the immediate danger."I think the probability of a real asset bubble burst in Korea is limited," Kang Min Joo, senior economist for South Korea and Japan at ING, told CNBC. She said that mortgage lending conditions have been relatively tight for several years, and authorities have maintained strict controls on loan-to-valuation and debt-to-income ratios. "While the LTV ratio was previously as high as 80%, it has fallen to below 40% and lower in Seoul area." The household debt-to-GDP ratio in the country stands at 90.14 as of 2024. Although it has fallen from the record high of 98.67 in 2021, it still is the second highest in Asia behind Australia.
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