Slow Real Estate, Risky Gap Investment

First of all, what will be the trend of house prices, which is a barometer of the real estate market? The outlook is prevailing that house prices will not rise for the time being. The real estate market is also shocked by Corona 19. Just as businesses try to secure cash by selling assets, individuals have no choice but to sell real estate when they are unable to pay off their loans. If supply exceeds demand, house prices are expected to decline for the time being. It is easy to think that the situation where the standard interest rate is near zero will be a good condition for buying a house, but if the credit crunch worsens, the CD-related interest rate related to mortgage loans may rise regardless of the standard interest rate. In conclusion, the real estate market is also expected to stagnate. The Ministry of Land, Infrastructure and Transport reported that land prices across the country, which had been on the rise for 113 months in a row, fell by one in the first quarter of this year. The current real estate downturn appears to be adjusting house prices in some overheated areas. In particular, a survey by the Korea Appraisal Service revealed that the jeonse price of Gwacheon apartments, where the sale and jeonse prices rose sharply, fell sharply after March, and the sale price also fell significantly.

 

The sector that is expected to be hit hardest by Corona 19 is the non-residential real estate market rather than housing. If the tenant faces difficulties due to the economic recession, the asset value of real estate may decline and auctions may increase in the future. Already, the overseas commercial real estate market showed a greater decline than the stock market. According to a report by the Korea Institute of Construction Industry, the REITs index, an indirect investment product that allows you to own real estate with a small amount, fell more sharply than the stock market. In the case of Japan, the Olympic postponement has even dropped to a level of half. It is not known how long this crisis will continue, but after the crisis there is a possibility that real estate prices will rise backwards. So, now, for those with abundant liquidity, in short, for those with a lot of cash, it may be an opportunity to buy a sale at a low price. If you are currently homeless, it is worth considering saving cash and buying a house. Conversely, if you own real estate, you'll have to endure difficult times somehow.