© Reuters. Nationwide house prices fell for the first time in 10 years… A decline of about 5% this year is expected.
Photo = News 1 Last year, it was found that housing sales prices nationwide fell for the first time in 10 years. Home sales prices are expected to decline by 5% this year and rebound from next year. ○The first place in the rate of house price decline is Daegu KB Financial Group’s Management Research Institute, which announced the ‘KB Real Estate Report’ on the 5th. According to the report, home sales prices nationwide fell 1.8 percent last year. It is the first time in 10 years since 2012 that annual home sales prices have declined.
The drop rate was the highest in Daegu (-5.2%). It was followed by Daejeon (-4.4%) and the metropolitan area (-2.7%). Gwangju (2.0%) was the only place where house prices rose.
Last year, housing transaction volume plummeted by about 50% compared to the previous year. Since July, the monthly average transaction volume has been only about 33,000. It is about 40% of the average monthly transaction volume (82,000 units) between 2017 and 2021.
Jeonse prices also fell 2.5% nationwide and 4.0% in the metropolitan area last year. ○Concerns about contraction of real estate in Daegu and Incheon
The research institute also disclosed the results of a survey conducted from December 12 to 26 of last year on real estate experts in the fields of construction, implementation, academia, and finance, nationwide brokerages, and PBs (private bankers). 95% of surveyed experts, 96% of brokers, and 92% of PBs predicted a decline in home sales prices this year.
35% of brokers in the metropolitan area and 26% of experts predicted ‘more than 5%’ as a drop. In the case of non-metropolitan areas, the rate of predicting a decline of 5% or more (36% of brokers and 39% of experts) was higher than that of the metropolitan area. The KB Financial Group (KS:) Management Institute predicted a decline in housing prices this year at 4.1%.
There were many predictions that home sales prices would rebound next year. 53% of brokers, 45% of experts, and 47% of PBs cited next year as the time of the rebound. The proportion of expecting a rebound in 2025 (29%, 34% and 40% in each group) was lower than in 2024.
They picked Seoul and Gyeonggi as areas with a high possibility of a good housing economy this year, and Daegu and Incheon as areas that will contract the most. As promising real estate for investment, reconstruction (21%), apartment sales (21%), new apartments built within 5 years of completion (16%), and redevelopment (12%) were mentioned in the order.
Brokers preferred new construction (16%), reconstruction (15%), and apartment sales (14%), while PBs preferred reconstruction (22%), new apartments (21%), and apartment sales (17%). ○The possibility of a sharp drop in house prices is small
For the time being, the housing price adjustment will continue, but the possibility of a sharp decline is small, the institute diagnosed. At the time of the financial crisis, the mortgage loan ratio (LTV) of major countries was over 70% (highest 100% in the US, 80-100% in the UK, 70% in Hong Kong, etc.) It didn’t lead to pressure.
In addition, as financial regulations were strengthened due to a surge in housing prices in 2019, the LTV of domestic households in the first quarter of last year was low at an average of 38.8%. In the case of the banking sector, more than half (58.4%) of households have an LTV of 40% or less, and only 1% of households have an LTV of over 70%. Accordingly, the institute judged that the possibility of a vicious cycle in which the recent rise in interest rates and the burden of loans lead to an increase in housing sales quickly is low.
Reporter Park Sang-yong
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