S. Korea cautions against expectations for higher home prices

25/9/2025 16:20

South Korea's central bank on Thursday cautioned against expectations for higher home prices that can stoke financial imbalances.



The Bank of Korea (BOK) said in its report on financial stability that the Asian country maintained a stable financial system on the back of the sound resilience of financial institutions and the strong capacity of external payment.



The BOK, however, noted that concerns remained about financial imbalances amid expectations for higher housing prices in the Seoul metropolitan areas despite a slower expansion in household debts, affected by the government's efforts to curb the massive household debts.



The new government of President Lee Jae-myung took a set of measures to contain household debts and housing prices, such as tighter lending regulations and plans to supply new homes.



The financial stress index, which gauges short-term financial instability, slightly fell to 16.5 in August, but the index stayed at a cautious range set between 12 and 24.