A customer shops at a major discount store in Seoul, Feb. 2. Yonhap
Experiences of high inflation led to strong demand for housing, and the government needs to make efforts to stabilize core inflation by focusing more on such a demand factor, a central bank report showed Tuesday.
According to the report by Choi Young-jun, a researcher from the Bank of Korea (BOK), real estate has been a popular hedge against high inflationary pressure in Korea, and 1 percentage-point growth in core inflation is projected to boost the chances of people in their 30s buying homes by 7.4 percentage points.
"Experiencing high inflation in the past served as a crucial factor for people to buy homes by resorting to excessive borrowing," Choi said.
"Strong housing demand among those in their 30s and younger is a characteristic of our society, which highlights a need for authorities to make price stabilization efforts by putting a focus on the demand side in order to prevent overheating risks of the property market," he added.
Houses account for more than 70 percent of total assets by Korean households on average, according to government data. (Yonhap)
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