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New home permits plunge 16.1% on-year in Jan.

New home permits dropped 16.1 percent from a year earlier in January, the government said Monday, amid a government move to limit the number of new homes as a way of curbing household debt.

Construction permits issued for new homes came to 39,898 last month, compared with 47,536 issued in the same month last year, according to the Ministry of Land, Infrastructure and Transport.

(Yonhap)
(Yonhap)

New home permits have been on a steady decline since July, except in November when they gained 3.2 percent on-year.

In July, the government announced plans to limit the supply of new apartments as a way of limiting the rise in mortgage loans, which was then blamed as the main cause of the increase in overall household borrowing.

New home construction permits dipped 25.9 percent on-year in July, followed by a 25.9 percent plunge in August and 45.4 percent in September.

Still, household debt continued to grow, reaching an all-time high of 1,344.3 trillion won ($1.19 trillion) as of end-2016.

In January, new home permits issued in the capital region plunged 21 percent on-year to 18,717, while those issued in the rest of the country slipped 11.2 percent to 21,181. The capital region includes Seoul and the surrounding Gyeonggi Province, and is home to nearly half of the country's 51 million population.

By type, construction permits for new apartments tumbled 20.3 percent, apparently in line with the government plan to reduce new supplies.

Permits for other types of housing, such as row and detached houses, slipped only 6 percent on-year to 13,322.

Amid a steady drop in construction permits, the number of groundbreakings for new homes also dropped 14.4 percent on-year to 26,688 last month, according to the ministry. (Yonhap)

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