Home prices forecast to drop 8 pct in 2009

SEOUL, Jan. 4 (Yonhap) -- South Korean home prices will likely drop up to 8
percent this year as an economic downturn is expected to undercut the already
sluggish housing market, a private think tank said Sunday.

Stung by the economic slump, the domestic housing market has been in the
doldrums, prompting the government to announce a package of measures to deal with
an oversupply and keep smaller builders from going under.
"With the economy slackening, the nation's housing prices are expected to fall 7
to 8 percent this year," said the research institute affiliated with top lender
Kookmin Bank. "A strong market recovery seems out of the question."
In the October-December quarter of last year, home prices fell 1.2 percent from a
year earlier, it said.
The current slump in the housing market is expected to last 10 to 12 months, hurt
by the sinking real economy, the institute predicted, saying the market suffered
a slump for 13 months during a financial crisis a decade earlier.
In late 1997, a dollar shortage put South Korea on the brink of insolvency,
forcing the country to take out a bailout loan from the International Monetary
Fund.
The government has unveiled a set of measures to help support struggling home
builders on concerns that a growing amount of unsold apartments may turn their
bank loans sour.
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