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Representatives of real estate brokerage firms predicted that house prices will rise further next year.
On the 29th, the KB Financial Group Management Research Institute released the ‘2021 KB Real Estate Report (Residential Edition)’, which summarizes the results of a survey of 506 cooperative real estate brokers and 161 real estate market experts this month. According to the report, 9 out of 10 realtors predicted that the house price would rise next year. The percentage of growth was expected to be 1~3% (26% for brokerage firms, 33% for experts). It is expected to be somewhat lower than the rate of increase in home sales (6.9%) until November of this year. The proportion of brokerage firms and experts predicting the decline remained around 10% each.
In the metropolitan area, brokerages that expected to increase by 1~3% were the most at 26%. 3~5% (25%), 5% or more (21%), and 0~1% rise (17%) followed. The number of brokerages predicting a decline was the least at 11%. Experts predicted that the metropolitan area would increase by more than 5% (39%) and the non-metropolitan area by 1 to 3% (39%).
By region, there was no response in Seoul that house prices would fall. 31% of respondents predicted that housing prices in Seoul would rise by 3-5%. In particular, in the Gangnam area, 80% is expected to rise within 5%. In the Gyeonggi area, 39% of experts predicted that it will increase by more than 5%, while only 21% of brokers responded in this way. In the case of other regions except the metropolitan area, 30% of brokerage firms are expected to increase by more than 5%. This is a figure that exceeds the rate of increase this year (2.3%).
The most common reason that Seoul’s house prices will rise next year is’shortage of supply’ at 28%. This was followed by an increase in demand for conversion to trading due to instability in the jeonse market (22%), side effects such as a decrease in sales due to strengthening regulations (19%), and interest rate cuts and abundant liquidity (16%).
There were many respondents who thought that the total price would also increase next year, mainly in the metropolitan area. 40% of brokerage firms in Seoul said that the total price of the metropolitan area would increase by more than 5%. 33% of experts predicted an increase of more than 7%. Since the introduction of the Lease Protection Act in August of this year, a decrease in rental properties (39%) was cited as the main reason for the increase in rental prices.
As for the time when house prices stabilize, the proportion of respondents that both the trading and the jeonse market will be in 2022 was the highest. As a countermeasure to stabilize the housing market, experts ranked redevelopment and reconstruction activation (29%) as the first priority. There were many opinions that brokerage firms activated transactions (23%) through lower transfer tax.
The housing price forecast index seen by consumers also hit a record high. According to the results of the December Consumer Trends Survey released by the Bank of Korea on the same day, the housing price forecast index reached 132, a two point increase from November. This means that the higher the index exceeds 100, the higher the rate of expecting the price of the house to rise. This month’s increase was the largest since the start of counting in January 2013.
Reporter Jeong So-ram [email protected]
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