Seoul: The rise in South Korea’s housing prices is set to partially slow in the second half of 2025 following major regulatory measures implemented in June, a central bank report said Sunday.

According to Yonhap News Agency, while apartment prices were expected to rise 6 percent by end-December compared with end-June, the government measures were estimated to reduce the increase by 1.6 to 2.1 percentage points.

In an effort to curb rising household debt and housing prices, the government in late June imposed a 600 million-won (US$428,800) cap on mortgage loans for property purchases in the capital region, while suspending home-backed loans for multiple-home owners.

The volume of mortgage loans, which was originally projected to grow 5 percent over the period, will instead expand at a slower pace, by 1.2 to 1.6 percentage points, it added.

“Enhancing macroprudential policies had a meaningful impact in limiting the growth of apartment prices and mortgage loans, but it was not sufficient to restrain the overall upward trend,” the report said.

The bank added that such macroprudential policies should take place ahead of rate cuts to have a more meaningful impact on housing prices and household debt.

“If rate cuts are carried out without stronger macroprudential policies, market participants may view them as a passive stance on financial stability. This could fuel expectations of further housing price hikes while raising risks to financial stability posed by the cuts,” it added.