Prospects of 4 real estate experts

Many experts have said that the game moves at a constant cycle. This is why the world was keen on the prospect that the economy would move every 10 years after the global financial crisis in 2008. But the ambush came from unexpected places. Corona 19, which started in Wuhan, China, spread throughout Asia including Korea and Japan in February. In March, a pandemic (a global pandemic) was declared as the virus spread to the United States and Europe. As it became known that the contagious power was considerable, “social distancing” became a new basic order. Customers in downtown areas have dropped to less than half of the usual. As consumption declines, self-employed people are going through a harsh period. The health crisis has become an economic crisis. As the number of confirmed cases began to increase, the US announced an economic stimulus package. The Federal Reserve System (Fed·Fed) lowered the standard interest rate on the 15th by 1.00 percentage points to 0.00~0.25%. It also made a decision to purchase government bonds and mortgage securities (MBS) at a value of 700 billion dollars, and to operate a direct purchase mechanism for corporate papers (CP). It means that the countermeasures used during the 2008 global financial crisis were brought out again.

 

So, how will this rate cut work in the real estate market? First, I started with the basics. When interest rates go down, money usually flows into the real estate market. Because they are expensive goods, it is virtually impossible to buy a home without a loan. Will this rate cut also bring money into the real estate market? Most experts analyzed that "there will be little effect of the rate cut." This is because it is difficult to raise funds due to tight loan regulations, and it is not easy to try to buy a house in the face of an economic downturn.

 

Kim Eun-jin, head of Real Estate 114 Research Team, said, "Generally, a lower interest rate will raise real estate prices, but this time, a variable called the recession will prevent the rise." Young-jin Ham, head of Jikbang Big Data Lab, predicted that “the public price of Seoul (as of January 1st) rose 14.8% year-on-year, resulting in an increase in the details of high-priced housing. As the transaction volume decreases, the downward pressure will increase again." How will the recent rise in real estate in the metropolitan area continue? [※ Note: In March, Seoul apartment sales price fluctuated to 0.02% for the first time since the December 16, 2019 measures. In Gyeonggi Province, the ascent width increased from 0.60% to 0.67%.] According to the statistics on the market price of KB Real Estate Liveon Apartments, the average sale price in the 3 Gangnam districts rose to 5,700,000 won in February 2020, from 49.37 million won per 3.3 square meter (about 1 pyeong) in 2019. Suwon, Yongin, and Seongnam in Gyeonggi-do, which were noted for their soaring, also rose from 16.25 million won to 17.11 million won during the same period. The number of transactions also increased between January and February in both Seoul and Gyeonggi.