The total value of South Korean housing market rose to a historic high of above 4 trillion won ($3.6 trillion) last year by the fastest pace in a decade.

According to Bank of Korea on Sunday, the value of the Korean housing market totaled 4,022.5 trillion won ($3.6 trillion) as of the end of 2017, up 7.6 percent from a year ago. It touched the 4,000 trillion won threshold for the first time and expanded at the fastest pace since 2007.

Korea’s housing market value soared by double digits before the global financial crisis in 2008. Its growth rate plunged to 5.8 percent in 2009 and further to the 3 percent level in the 2012-2013 period. It started recovering since 2014 as the government eased regulations and lowered borrowing costs to boost the property market.

Meanwhile, the housing market expanded faster than income growth last year. Korea’s gross disposable income reached 1,722.5 trillion won in 2017, up 5.1 percent from a year ago.

Due to the rapid growth of the housing market, which is faster than the income growth, people will be forced to take out a loan to buy their house, said Kim Gwang-seok, an adjunct professor at Hanyang Univesity.

By Yoon Won-sup and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]