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Eight out of 10 real estate experts predicted that house prices will continue to rise this year. New apartments in Gangnam, Seoul and Ma, Yongsan, and Seongdong (Mapo, Yongsan, and Seongdong-gu) are expected to lead the uptrend within three years. This is the result of a survey conducted by the Korea Economic Daily on ‘2021 real estate market outlook and investment strategy’ targeting 100 real estate experts on the 26th and 30th of last month.
42% of respondents predicted that the nationwide apartment sales price would increase by 3~5% this year. Adding ‘1~2% increase’ (27%) and ‘5% or more increase’ (10%) means that 79% of the total expects strong trading prices. In a survey in September last year, the most common was 50%, but the atmosphere changed after three months. Only four experts (4%) predicted a price decline. Lee Sang-woo, CEO of Invade Investment Advisory, explained that “factors that stimulate the sale price, such as supply shortages and tax regulations, will have a direct impact on the real estate market this year.”
Jeonse prices are also expected to rise along with trading prices. 95% of respondents predicted an increase in jeonse prices this year. ‘3~5% increase’ was the most at 38%, and ‘1~2% increase’ and’more than 5% increase’ were 34% and 23%, respectively. It is analyzed that the storm will continue this year after the enforcement of the new lease protection law such as the right to apply for contract renewal.
36% of experts cited’a new apartment within three years of moving in’ as a promising investment this year. This was followed by’reconstruction and redevelopment’ (31%),’small and medium-sized buildings’ (10%), and’land near development sites such as Sejong City’ (9%). The reason for the recommendation was that the scarcity value of new apartments increased due to the shortage of supply and the continued preference for chartered apartments. Kwak Chang-seok, CEO of City and Space, said, “From the second half of last year, there is a shortage of new apartments in the jeonse market.” He predicted that “new apartments will drive the price increase in the overall sales and jeonse market this year.”
It is evaluated that reconstruction and redevelopment, which are traditional real estate investment products, are still attractive. Experts advised that homeless people would be advantageous in preparing my home to actively target the increased public sales volume, such as pre-subscription to the third new city in the second half.
Real estate to shine in the new year… ‘Gangnam·Mayongseong’
‘New Year Real Estate’ asked 100 experts
“I hurry up to prepare my house by using the subscription passbook such as special supplies.”
Real estate experts advised that end-users should prepare a home through special supply for the first time in their lives for newlyweds, priority supply to the third new city, and quick sales in the first half of the year before the increase in the ownership tax. It means that end-users should start building my own home within one quarter as the rise in apartment sales and rental prices across the country can be prolonged.
New apartments within three years of moving in were selected as a promising real estate investment destination this year. There were many opinions that small and medium-sized buildings, which are relatively free from restrictions on reconstruction and redevelopment and loans and ownership tax, are also worth investment.
“Both sales and charters will rise this year”
As a result of a survey of 100 real estate experts by the Korea Economic Daily, 95% of respondents expected the nationwide apartment rental price to increase this year. The most frequent ‘3~5% increase’ was 38%. Next, the ratio that ‘1~2% rise’ was expected to rise by 34% and’over 5%’ was 23%.
About half of the experts (48.4%) predicted that the increase in the total price will continue until the end of the year at least. 25.3% answered that the upward trend will continue for two years until the second half of next year. Hak-Ryeol Kim, head of the Smart Tube Real Estate Research Research Institute, said, “This year, the number of occupants will be cut in half and the lease registration system will be implemented from June.” . Jae-Hyun Jang, head of Real Today, said, “The aftermath of the enforcement of the Lease Protection Act continues, and it takes at least two years for the government’s supply policies, such as public sales, to take effect.”
There were overwhelmingly many outlooks that the trading price would also increase thanks to the increase in the jeonse price. 79% of all respondents predicted that this year’sales price rose’. ‘3~5% increase’ was the most frequent at 42%. This was followed by ‘1~2% increase’ (27%) and ‘5% or more increase’ (10%). EAR Research CEO Hong Chun-wook said, “Since there is a lot of demand for jeonse, it is difficult for the trading price to fall easily.” “As it becomes difficult to obtain a jeonse, the demand for purchase is continuing.”
“New apartment is the best investment”
New apartments were picked the most as promising investment destinations this year. 36% of respondents recommended investing in a’new apartment within 3 years’. Next, they cited’reconstruction and redevelopment’ (31%) and’small and medium-sized buildings’ (10%). “The reason the pre-sale market has enjoyed a great boom in the past few years is due to concerns that the new supply from the private sector will decrease,” said Kwon Il, head of the real estate information research team. . City and Space CEO Kwak Chang-seok predicted that “the price will continue to rise due to the high demand for chartered new apartments.”
It is evaluated that reconstruction and redevelopment are still attractive. However, experts point out that there is policy uncertainty and it is necessary to approach them selectively. Myung-sook Ahn, head of the Real Estate Investment Support Center of Woori Bank, predicted, “There will be an election for the mayor of Seoul this year, so the supply tone for maintenance projects may change.” Lee Joo-hyun, CEO of Wolcheonjae Tech, said, “We can approach public redevelopment, which is willing to revitalize at the government level, according to conditions.”
However, Ji-hae Yoon, Senior Research Fellow of Real Estate 114, advised, “If it is not a complex, whether it is in the second half of the project, whether it is reconstruction or redevelopment, it is necessary to consider the fact that funds can be tied up for a considerable period of time.
“If you are a real consumer, you are more likely to have a home in the first quarter”
As for the items asking for promising investment areas, 35% of experts selected’Gangnam 4 districts’ such as Gangnam, Seocho, Songpa, and Gangdong-gu, Seoul. Next,’Ma, Yong, Seong (Mapo, Yongsan, Seongdong-gu)’ and’Su, Yong, Seong (Suwon, Yongin, Seongnam)’ received 20% and 19% respectively.
Although various regulations such as the land transaction permit system have been concentrated in Gangnam, it is a sign that it will become the epicenter of the nationwide increase in house prices. Since the end of last year, demand for investment has been rushing, and reports are being updated one after another. Center Director Ahn Myung-sook said, “Last year, prices in non-regulated areas and mid- to low-priced complexes were remarkable,” he said. “But now, the perception that Gangnam, which was not able to rise much due to regulation, is spreading.” Lee Wol-moo, CEO of Mid-Me Networks, predicted, “The trend toward’smart one’ preference and polarization will lead to liquidity in Gangnam, which will allow further rises.”
Director Kim Hak-Ryeol said, “If the increase in house prices begins in Gangnam, the next feed of Ma, Yong, and Seong will increase, gradually expanding the area and spreading it.” .
There were many opinions that end-users would hurry to prepare their own home as the trading price and the rental price increased together. 47% of the respondents said that it is most advantageous to arrange a home within the first quarter of this year. Team leader Kwon Il said, “It is worth aiming for rapid sales in the first half of the year due to strengthening regulations such as an increase in the holding tax.” Director Jang Jae-hyun said, “From this year, the threshold for special supply has been lowered, and public sales are pouring out in the 3rd new town, Yongsan maintenance window, and so on.” However, 26% of experts ordered’to hold off buying a house for the time being.’
Reporters Yoo-jung Lee/Yeon-il Jeong/Jung-cheol Bae [email protected]