Real estate market experts predicted that house prices and rental prices will continue to rise next year. They pointed out that the supply shortage is the factor that will boost the house and rented prices.
An apartment in Gangnam area as seen from Maebongsan Mountain in Seoul on the afternoon of the 1st. yunhap news
On the 29th, the KB Financial Management Research Institute published the ‘2021 KB Real Estate Report’. It contains the results of a survey of about 500 brokerage offices nationwide, academia and experts, etc.
Real estate brokers forecast home sales prices. There were many cases where an increase was expected. Except for Seoul’s Gangbuk, the metropolitan area, and five metropolitan cities, the increase was seen significantly. KB Finance
9 out of 10 realtors will increase their house prices next year
Nine out of 10 real estate agents expected a rise in house prices next year. About one out of three brokers (30% of brokerages in the metropolitan area, 32% of brokerages in the non-metropolitan area) predicted that the house price would increase by 1-3%. It was followed by a 0~1% rise (29% in the metropolitan area and 20% in the non-metropolitan area). Considering the increase rate of home sales price (6.9%) from January to November this year, the rate of increase is expected to slow down somewhat, but the amount is not small considering the increase in house prices already this year.
The outlook for housing prices by region also turned upward. In particular, in Seoul, there was no response predicting a decline in house prices. The rate of increase in house prices predicted by brokers in the Seoul area was concentrated in 3~5% (31%). Some 30% of respondents said that the house price in Gangbuk, where the house price is relatively cheap due to various loan regulations, will increase by more than 5% next year. In addition, brokerages operating in regions other than the metropolitan area and five metropolitan cities also showed the highest forecast of an increase of 5% or more.
The reason for the rise in house prices was a shortage of supply (28%) and an increase in demand for conversion (22%) due to unstable jeonse market. In the case of Gyeonggi-Incheon, the jeonse market was unstable (27%) and sales decreased (19%) due to tightening regulations.
Constructors, experts “The metropolitan area will rise by more than 5%”
Real estate experts’ expectations were not different from those of brokers. The house price is expected to rise next year. In the case of the metropolitan area, 39% of respondents viewed the increase in house prices as 5% or more, followed by a 3~5% increase with 30%.
In the case of experts, the forecast for the rise in the metropolitan area was higher than that of brokerages. In particular, 45% of experts in the financial sector predict that housing prices in the metropolitan area will rise by more than 5% next year. In the non-metropolitan area, 39% of cases were predicted to increase by 1-3% next year. Experts cited the conversion of jeonse demand (23%) and supply shortages (22%) as factors for rising house prices.
There were also concerns about the polarization of housing prices by region. Experts have suggested that the price of a house in the non-metropolitan area could rather lower the price. It was surveyed in order of 1% decline (9%) and -3~-1% decline (6%). In response, the Management Research Institute analyzed that “in the non-metropolitan area, the trend of population decline continues, the economic contraction is prolonged in the aftermath of Corona 19, and it is necessary to watch whether the recent rebound price flow will continue.”
Pre-set prices predicted by realtors. More than 90% of them predicted an increase of more than 5% in Gangbuk. KB Finance
The total set value goes up more… Seoul is expected to rise by more than 5%
It is not only expected that house prices will rise next year. There were many opinions that the total price would also increase. Most opinions predicted an uptrend of about 5%. In particular, in the case of brokerage offices in Seoul, 40% of the respondents predicted that the total price will increase by more than 5%. In particular, in the case of the Gangbuk region, half of the brokerages were expected to increase by more than 5%. In the Gyeonggi-Incheon region, the opinion of an increase of more than 5% was the highest with 32%.
The same was true of experts. 33% of experts predicted that the total price of the metropolitan area would increase by more than 7%, and the forecast for a 5-7% increase was also 27%. More than half of the experts are expecting a surge of over 5%. 89% of experts predict a rise in the non-metropolitan area.
As the reason for the increase in jeonse prices, both brokerage firms and experts cited the decrease in jeonse sales that occurred after the introduction of the second lease method. When looking at the metropolitan area, such as Seoul, 43% of brokers and 39% of experts pointed out that the price of jeonse is upbeat due to the decrease in jeonse. Only 9% of brokers and 7% of experts cited the low interest rate that the government claims to be the cause of the cheonsei crisis.
The Management Research Center also said, “Since the number of new occupants nationwide will gradually decrease after 2021, the jeonse market may be intensified due to supply shortages.” It is judged that more than anything else, measures to expand supply such as implementation are necessary.”
Stabilize the housing market as expected by realtors. There were many opinions that were viewed as between 2021 and 2022. However, 23% of the cases in Seoul are forecasting a continuous increase. KB Finance
Real Estate Expert “The housing market stabilizes only in the first half of 2023”
Brokers predicted it would take some time for housing prices to stabilize. If the scope is narrowed down to Seoul, 55% of respondents believe that the home sales market will stabilize in 2021-22. In the case of Gyeonggi-do and Incheon (52%) and five metropolitan cities (65%), the market is expected to stabilize until the next year.
On the other hand, it was expected that it would take more time for the jeonse market to stabilize. The Seoul charter market was most often expected to find stability until 2023 (28%). There is also a 30% forecast that the jeonse price will continue to rise.
The expert’s outlook was a little more pessimistic than the brokers. 60% of respondents predicted that the housing market would stabilize only in the first half of 2023. In particular, more than 40% of experts in the financial sector believe that the rise in trading and jeonse prices will continue after 2023.
The ratio of my house arrangements was high during the last government’to buy out of debt’
KB Finance also analyzed the status of buying homes for the first time in their lives of their 20s and 30s. This is the result of a survey of household heads who were married within the last 10 years and were under the age of 39 at the time. In the first year of marriage, 26.2% of them became homeowners. In the fourth year of marriage, 51% of them succeeded in building a home, and 78.8% of them owned their own family in the 10th year of marriage. In Seoul, this rate was rather low. Within 10 years of marriage, the percentage of successful establishment of my home was 60%, which was 20 percentage points lower than those in the five metropolitan cities.
What stands out is that the fate of riding the ladder of my home arrangement was mixed according to the year of marriage. In the case of married couples in 2013-17, when the government implemented an aggressive loan policy, saying,’Go home from debt,’ the average rate of becoming landlords at the same time as marriage was 32.7%, more than 10 percentage points higher than the previous period. On the other hand, in the case of married couples in 2018, the ratio of my house arrangements was 25%, and in 2019, it increased to 30.6%. However, the report analyzed that there were also effects such as a decrease in the number of marriages.
Reporter Ahn Hyo-seong [email protected]