Housing market outlook for the first half of next year

Reporter Kim Deok-soo of the Korea Construction News = Real Estate 114 conducted a survey of 1,439 people nationwide for 15 days from November 9 to 23. I expected the price to rise. Compared to the previous survey, 49% of respondents for sale and 63% of jeonse respondents predicted an increase in home prices, the proportion of the increase increased significantly. In addition, since Real Estate 114 started a related survey in 2008, the proportion of rising responses was the highest. On the other hand, the downtrend was only 5~7% of all respondents (7.51% for trading and 5.42% for jeonse). Although the government has announced various regulatory policies so far, it seems that unlike expectations, housing prices steadily risen, affecting consumer responses.

 

About half of the respondents to the increase in selling prices were ‘increased apartment prices in Seoul and other metropolitan areas (45.52%)’. This is interpreted as the fact that from the first half of 2020, Seoul, Gyeonggi and Incheon, which have good accessibility to Seoul, have led the market price increase. After that, the response to “Intensifying supply shortage in downtown Seoul (27.69%)” was high. This is because apartment occupancy is expected to decrease significantly in 2021 in Seoul and the metropolitan area. In addition, ▷a balloon effect on the lower regions (16.14%) ▷a domestic economic recovery forecast in the first half of 2021 (4.38%) ▷apartment pre-sale market activation (3.59%) was also selected as a factor for rising housing prices. On the other hand, 26.85% of the respondents who predicted that the trading price would fall, answered'the possibility of a macroeconomic recession' as the main reason. There is an atmosphere of concern that the domestic and global economic growth rate has turned negative due to Corona 19 in 2020, and it could lead to a real economic downturn such as real estate.

 

Of the 1,116 people who answered that the jeonse price is rising, 31.09% said that it was due to the effect of the enforcement of part of the 3rd Lease Act (the right to apply for contract renewal, the monthly rent limit system). Due to the long-running minimum interest rate and the issue of strengthening the holding tax, the rate of rent conversion by landlords is faster than in the past. After that, ▷Lack of occupancy in popular areas such as Seoul (19.18%) ▷ Increased demand for jeonse due to shrinking purchase sentiment (17.20%) ▷Increase in temporary jeonse residence for subscription (5.56%). On the other hand, for the prospect of a decline in jeonse prices, the main reason was “the risk of returning the lease deposit due to high jeonse prices (33.33%).” In recent years, cases where the jeonse price approaches or exceeds the selling price have occasionally appeared, and the number of cases where the jeonse guarantee insurance company returned the deposit on behalf of the landlord has increased significantly. Next, ▷the government's announcement of stabilization measures for the cheonsei market (28.21%) ▷The increase in jeonse sales (23.08%) due to the impact of gap investment ▷The decline in jeonse demand (15.38%) due to the conversion of existing homes was selected as the reason for the decline in jeonse prices .