‘Interest rate cut – loan regulation + jeonse rise’… What will house prices be this fall?

The rate of increase in housing prices in Seoul has been slowing down recently. This was because housing prices rose so much and lending regulations were strengthened. But the timing is also very strange. As soon as the Minister of Land, Infrastructure and Transport mentioned “stabilizing housing prices” in the National Assembly audit last week, the rate of increase in housing prices in Seoul, although only slightly, is raising its head again.

The increase has expanded in Seoul, the metropolitan area, and nationwide. The interest rate cut may have stimulated the housing market somewhat. However, experts predicted that a ‘subtle upward trend’ would continue. Many predict that the buying trend will not pick up sharply because the impact of tightening lending regulations is greater than the interest rate cut.

Weekly apartment sales price change rate/graphic = Bizwatch

The rate of increase in Seoul increased in 5 weeks… Preferred location report price

According to the Korea Real Estate Board’s weekly apartment sale price index change rate, nationwide apartment sale prices increased by 0.02% in the second week of October (as of the 14th). Although the increase is slight compared to the previous week (0.01%), it is an increase.

House prices have been rising for 18 consecutive weeks, but this is the first time in 5 weeks that the narrowing increase has expanded again. The increase also expanded in Seoul (0.10% → 0.11%) and the metropolitan area (0.06% → 0.07%).

In Seoul, house prices have been rising for 30 consecutive weeks since the last week of March (25th, 0.01%). By distinction, Gangnam-gu recorded the highest increase rate, rising 0.27%, mainly due to the Gaepo and Apgujeong-dong reconstruction complexes. Preferred areas such as Yongsan (0.19%), Seocho (0.18%), Mapo (0.18%), Seongdong (0.16%), and Gwangjin (0.15%) also exceeded the Seoul average increase rate.

The Korea Real Estate Board said, “Overall buying sentiment has weakened and the wait-and-see attitude continues due to fatigue with price surges and the impact of loan regulations,” but added, “The overall increase has expanded slightly as reported transactions have occurred in some reconstruction complexes and new construction complexes.” explained.

According to the Seoul Real Estate Information Plaza, last week, Gaepo Jugong 5 Complex in Gaepo-dong, Gangnam-gu (1983) with an exclusive area of ​​74㎡ (6th floor) was sold at KRW 2.8 billion, Raemian Daechi Palace in Daechi-dong (2015) with an exclusive area of ​​94㎡ (at 5th floor) was sold at KRW 4.2 billion (5th floor), and Daechi I. In 2008, 59㎡ exclusively for the park was traded for 2.65 billion won (14th floor), setting a new record price.

In Yongsan-gu, 138㎡ exclusively for Ichon-dong Riverview Mansion (1970) was traded at a reported price of 1.5 billion won (4th floor), and in Mapo-gu, 59㎡ exclusively for Mapo World Cup J-Sky (2021) was traded at a reported price of 730 million won (4th floor).

However, even with the reported price parade, experts evaluate it as a ‘strong suit.’ What I’m saying is, don’t dilly-dally. Ham Young-jin, head of Woori Bank’s Real Estate Research Lab, said, “There may be some impact from the interest rate cut and the increase in jeonse prices, but transaction volume has been decreasing since peaking in July due to household loan regulations.” He added, “I think the increase will not increase and will remain close to flat. “he said.

Baek Sae-rom, a senior researcher at Real Estate R114, also said, “The partial increase in the rate of increase is not very significant,” and diagnosed, “As the trend of strengthening lending regulations rather than lowering interest rates continues, it is highly likely that the buying trend will not be able to keep up and will move sideways, fluctuating from a weak level.”

He said, “Trading volume was supported when the rise was at its peak, but fatigue from the rise had accumulated,” and “In a situation where the burden of interest rates has increased due to lending regulations and a wait-and-see atmosphere has been created in the market, sellers have maintained their asking prices without lowering them, so volatility is not felt much.” He added.

Among the metropolitan area, the weekly sales price increase rate increased in Incheon from 0.02% last week to 0.06% this week, and in Gyeonggi from 0.04% to 0.06%. Local house prices were -0.03%, a larger decline than the previous week (-0.02%).

Weekly apartment rental price change rate/Graphic=Bizwatch

Due to the wait-and-see sales tax, actual demand for rent and monthly rent… Price burden ↑

Jeonse prices are on the rise all over the country, including local areas. This is because real consumers who took a wait-and-see attitude toward sales due to rising housing prices flocked to the jeonse and monthly rent markets. Unlike the sales market, where the rate of increase is expected to be limited, the rate of increase in the jeonse market is expected to expand.

According to the Real Estate Agency, as of last week, nationwide jeonse prices increased by 0.06%. The increase rate increased slightly compared to the previous week (0.05%). Seoul (0.10%) maintained the level of the previous week, while metropolitan areas such as Incheon (0.20% → 0.26%) and Gyeonggi (0.08% → 0.11%) increased the increase (0.10% → 0.12%), and regional areas (0.00% → 0.01%) ) also turned upward.

Lab Manager Ham said, “It is the moving season and prices are bound to rise due to low supply due to lease properties being converted to monthly rent.”

Baek Sae-rom, senior researcher, said, “In the rental market, like the sales market, loans are in a tight state, so the burden of deposits is increasing.” He added, “There is a high possibility that the demand group that cannot reach the higher sales price will remain in the rental market, so there is room for increased price pressure.” and analyzed it.