"Home purchasing burden increases due to rising home prices and

decreasing household income"

- Home purchasing burden peaks since 4Q 2009-

City workers' home purchasing burden has soared due to rising home prices and decreasing household income.

The Korea Housing Finance Corporation (HF, CEO Kyung-ho Kim) announced on September 19 that as of the end of June, the Korea Housing Affordability Index (K-HAI) was a national average of 71.4, up 2.8 points from 68.6 at the end of March.

An increase in home purchasing burden despite a decline in loan rates (down 0.4 percent quarter-on-quarter) at the end of June 2011 was due to rising home prices (up 2.5 percent quarter-on-quarter) and decreasing household income (down 1.8 percent quarter-on-quarter) of city workers .

K-HAI increased quarter-on-quarter in all regions because of a rise in home prices.

In particular, home purchasing burden jumped in the regions with a great increase in housing prices such as Gwangju (up 15.0 percent), Jeju (up 10.0 percent), Chungbuk (up 7.7 percent), Ulsan (up 7.4 percent) and Busan (up 7.0 percent).

By contrast, the Seoul Metropolitan area (Seoul, Incheon, Gyeonggi-do) with below the national average (2.5 percent) of housing price hikes showed just a slight gain in home purchasing burden.

Looking at K-HAI by size of housing, the index for houses (60㎡ or smaller) and houses (between 60㎡ and 85㎡) increased 5.6 percent and 3.8 percent, respectively. The figure for houses (between 85㎡ and 135㎡) and houses (over 135㎡) inched up 2.3 percent and 1.6 percent, respectively. It seems to be because small-sized houses' price hikes were greater.

In particular, houses (between 60㎡ and 85㎡) in Jeju (19.9 percent) and Jeonnam (13.4 percent) and houses (60㎡ or smaller) in Gwangju (13.7 percent) and Busan (12.3 percent) showed the biggest increases in K-HAI in the nation due to an increase in housing prices.

※ Korea Housing Affordability Index (K-HAI)

K-HAI introduced by HF in 2008 shows that the lower figure means the lower home purchasing burden of city workers. An index above 100 signifies that it is hard to repay the debt.