Seoul to support house purchases, rein in household debtUpdated: 2014-02-27 06:38:29 KST
Balancing record-breaking exports with greater domestic activities is a key economic objective of President Park Geun-hye's three-year plan, and as the first concrete step toward boosting domestic demand, the government has put together a detailed plan to reinvigorate the housing market.
Finance Minister Hyun Oh-seok told a meeting of economy-related ministers on Wednesday that there is an urgent need to stabilize skyrocketing housing rent fees to allow consumers to spend more on other things.
To control prices in Korea's traditional rental system called "jeonse," the government will make sure some 500-thousand new homes will be built over the next three years.
The government will also offer low-interest loans totaling 11 trillion won, or 10 billion U.S. dollars to new home-buyers to ease their burden.
It'll also draw up tailored plans for people seeking to rent their home on a monthly basis.
Wednesday's move came one day after President Park unveiled a three-year plan aimed at overhauling the Korean economy into a vibrant trend-setter from a fast-follower.
"To boost the domestic economy, we must lower the burden on the middle-class - on ever-rising jeonse prices, and household debts that have always held back solid growth."
And to rein in the household debt issue, Seoul aims to lower households' disposable income-to-debt ratio by five percentage points by 2017.
The finance ministry also said it would raise household income -- by creating new jobs, particularly for women and young people.
Song Ji-sun, Arirang News.
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