The government said Wednesday it will nurture the property market into becoming a high value-added service sector by boosting real estate investment funds in a bid to make it a new economic growth engine.

The Ministry of Land, Infrastructure and Transport said it will lower barriers and give tax incentives to boost the real estate investment trusts sector to spearhead the development of the local properties market.

REITS are a type of security that invests in real estate to be traded on major exchanges and provides investors with stakes in real estate such as office buildings, apartments and hotels.

In South Korea, however, the REITS market has remained fledgling as the average amount of investment stands at 40 billion won compared with 4.6 trillion won in the United States and 2 trillion won in Japan. And only three out of 128 REITS are listed on the bourse.

The ministry will lower related barriers and offer tax incentives to encourage real estate developers to expand their investments and list their REITS on exchanges.

"We will foster REITS as the leading sector of the local properties market," said the ministry. "We will develop profitable REITS models and encourage developers to list their trusts with tax incentives."

South Korea has made efforts to revive the local property market through various fiscal and monetary support actions.

The financial authorities eased a set of mortgage regulations that made borrowers easier to receive loans to buy houses, while the central back slashed the base rate to a record low of 1.5 percent.

On the back of such stimulus measures, over 1.19 million home transactions were made in 2015, up nearly 33 percent from an average of 898,000. (Yonhap)