(For full coverage of rate policy, click [KROCRT=ECI])
* S.Korea may curb mortgage lending further on bubble fears
* Survey, private data point to more property price gains
* Bank of Korea may become first G20 cen bank to raise rates
* BOK, government at odds over timing of tightening (Updates with latest apartment prices, markets, G20)
By Cheon Jong-woo and Yoo Choonsik
SEOUL, Sept 25 (Reuters) - South Korea's top financial regulator said he was ready to impose more controls on home loans to calm the property market, whose relentless rise could make the country the first G20 economy to raise interest rates.
The threat on Friday came as fresh evidence showed the housing boom is alive and kicking despite previous controls, adding to investor belief that the Bank of Korea will lift interest rates as soon as November to keep any potential asset bubbles in check.
South Korea imposed controls on mortgage lending in key areas early this month, but data released on Friday by its top local lender showed apartment prices across the country rose for a 16th consecutive week. [ID:nSEO324778] [ID:nSEO153212]
"We are closely watching details on loans by non-bank financial companies. If their lending is found to reduce the effect of recent measures on banks as concerned, we are preparing more steps," the chairman of the Financial Services Commission, Chin Dong-soo, told reporters.
The commission is part of the government and Chin had long served at the finance ministry.
South Korea's central bank has repeatedly hinted that it was ready to lift interest rates to arrest the housing and mortgage boom. But it has been openly at odds with the government, which fears tightening policy too early could jeopardise the country's tentative economic recovery.
Finance Minister Yoon Jeung-hyun reaffirmed the government's position when he told Reuters in an interview he was against an early rate hike and it was not yet time to discuss removing measures which were brought in to support the economy through the global downturn. [ID:nN24206736]
The Group of 20 rich and developing countries, holding a two-day summit in Pittsburg, also pledged to keep emergency economic supports in place until a durable recovery is secured, and to work together when the time comes to remove them, according to a draft communique obtained by Reuters. [ID:nSUM000113]
UPBEAT ON HOUSING, BRACE FOR RATE RISE
Money market rates in South Korea have been climbing in
recent weeks in anticipation of increases in the central bank's
benchmark 7-day repurchase agreement rate
Such anticipation has also persuaded companies to issue bonds in a hurry, with the Korea Financial Investment Association saying on Friday corporate bond issuance plans for the next week hit a 4-month high of 1.73 trillion won ($1.45 billion).
"It seems even the tightened loan regulations are not very effective in averting a property bubble," said a property analyst at a local asset management company, asking not to be identified as he was not authorised to speak to the media.
"They can directly threaten lenders but given that banks derive much of their revenue from mortgage lending, they have no choice but to raise the rates."
Central bank data on Friday showed South Koreans expect the property boom to continue, with a measure of their sentiment toward residential and commercial building prices rising to the highest since it started compiling the data last year. [ID:nSEO135612]
The data also showed the September consumer index toward interest rates rose for an eighth consecutive month to 132, the highest since July 2008, suggesting South Koreans were bracing for monetary tightening over the coming months.
South Korea's most influential housing price index, compiled by Kookmin Bank, is still slightly below a year ago's level but has risen for the past five consecutive months.
Some analysts say the central bank looks determined to raise rates as early as November, despite huge pressure from the government to wait.
"(It is) too premature to touch upon interest rates," Finance Minister Yoon told Reuters in Pittsburgh where he was attending the Group of 20 summit.
The consumer sentiment index, which measures how consumers view the future in six categories, stood unchanged at 114 from August, pausing after five consecutive months of improvement, the Bank of Korea data showed.
The two indices on housing prices and interest rates are not part of the overall consumer sentiment index but are released as supplementary data.
For a graphic on house prices and consumer sentiment, see: http://graphics.thomsonreuters.com/099/KR_HSP0909.gif ($1=1196.1 Won) (Additional reporting by Seo Eun-kyung, Walter Brandimarte and Paul Eckert in Pittsburgh; Editing by Jonathan Thatcher & Kim Coghill)