New government announced additional property measures as following: multiplehome owners in areas of speculation (4districts of Gangnam and 7other districts inSeoul) will have to pay higher taxes on capital gains and face restrictions in gettingmortgages, with individuals owning three or more houses subject to up to 60% tax.Single house owners are currently exempt from capital gains tax if owned for morethan two years. If the houses are located in areas of speculation, their owners won'tget tax exemptions unless they have lived in the house for a minimum of two years,in order to discourage buying homes for reasons other than residency.    Individuals wanting mortgages are subject to the 40% loan-to-value (LTV) and debtto-income (DTI) ratios. Those who already have a home with a mortgage will have tofollow 30% LTV and DTI. Those who buy houses in areas of speculation will have tosubmit their financing plan. Also, the government is planning to supply 170,000rentalhomes every year for the next five years.    Short-term negative but long-term positive: We think these new propertymeasures are strong enough to tighten speculation on surging Seoul property prices.In particular capital gain taxes are high enough for multi-home owners. Thus we thinktransaction volumes are set to decline. Also reconstruction and redevelopment priceshave impacted overall property prices, which may negatively also affect Seoulhousing prices. This shows the new government’s strong efforts to restrainspeculative demand as it thinks it may damage the economy if individual debtincreases ahead of fundamental improvements in the economy. The previousgovernment eased property measures in order to boost economic activity but thecurrent government’s stance is that artificially boosting the domestic economythrough property revitalising measures, may end up having the opposite effect. Weare cautious on the domestic property market in the short term but longer term wecontinue to be positive on the back of increasing housing supply and stabilisingproperty prices leading to a healthy economy. Thus, we maintain our Buy rating bothon Hyundai Development Co.(TP KRW67,000, 012630KS, Buy) and DaelimIndustrial Co. (TP KRW116,000, 000210KS, Buy).

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