Rate Hikes Put South Korea’s Largest Apartment Complex in Focus
- Lack of demand may fuel fears over property slump, credit risk
- Bank of Korea policy meeting Friday comes as economy weakens
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South Korea’s largest-ever apartment complex risks turning from national milestone into financial millstone amid fears that sluggish sales might herald the kind of property slump that sends shockwaves through the economy and credit markets.
The vast Dunchon project in Seoul is designed to accommodate more than 10,000 households and has been one of the most anticipated developments in a country that heavily favors apartments. But it has run up against a looming glut of new homes and a string of interest-rate hikes by the Bank of Korea that has pushed up borrowing costs and turned buyers wary.