Real estate experts say, “Polarization phenomenon is difficult to resolve through policy”[집값 격차 사상 최대]③

“Population is decreasing and focusing on places with jobs and infrastructure” “Policies such as regulations on land transaction permits in Seoul are not everything” “Expanding infrastructure and transportation networks in local areas… improving awareness of multi-homeowners”

[서울=뉴시스] Reporter Kim Jin-ah = According to the ‘Apartment price trends for the first week of October (as of the 7th)’ announced by the Korea Real Estate Agency on the 10th, apartment prices in Seoul this week rose 0.10% from the previous week, continuing an upward trend for 29 consecutive weeks. The increase has been reduced due to the effects of lending regulations and accumulated fatigue from short-term surges. The photo shows an apartment complex in downtown Seoul as seen from Namsan in Seoul on the 10th. 2024.10.10. [email protected]
[서울=뉴시스] Reporter Gahye Ko = The gap in real estate polarization is widening. Even within Seoul, the gap between Gangnam and Gangbuk is widening to an all-time high, and even within the provinces, patterns are becoming more segmented by region and product, with areas that laugh and cry depending on location and transportation.

In relation to this, experts explain that there is no ‘fundamental’ solution to prevent this phenomenon through policies such as real estate regulation alone, and that an understanding of market logic is needed, such as expanding various infrastructure and improving awareness of multi-homeowners.

According to a Newsis report on the 18th, real estate experts have recently used various terms such as ‘decoupling phenomenon’, ‘triple polarization’, and ‘era of individual battles’ to describe the polarization phenomenon that has recently occurred between apartments and non-apartments, Seoul and the provinces, and Gangnam and Gangbuk. It is explained as follows.

Park Won-gap, senior real estate expert at KB Kookmin Bank, said, “Apartment prices in Seoul and the metropolitan area are rising, but in the provinces they are falling. There is also a large temperature difference between apartments and non-apartments such as villas and multi-family houses that are in the swamp of stagnation.” “This is because investment is becoming an asset and regional economic conditions are also differentiated. However, if you only focus on a specific market in this situation, it is easy to misunderstand that the entire market is the same, so we must be wary of optical illusions in the real estate market,” he explained.

Lee Eun-hyeong, a researcher at the Korea Construction Policy Institute, said, “As the population decreases, the concentration of population becomes more concentrated in major cities and regions with jobs and living infrastructure. Ultimately, the most representative major region in Korea is Seoul. Preferences are growing not only in Seoul but also in the metropolitan area. “It is highly likely that price increases will only occur in areas with high prices,” he predicted.

Ham Young-jin, head of Woori Bank’s Big Data Lab, said, “This year, there was a lot of demand for replacement with smart homes, especially in Seoul and the metropolitan area, so there was a recovery in high-priced transactions in the Gangnam area and the Han Riverside area.” He explained, “There is a strong concentration of demand in areas where the supply scarcity of new construction is highlighted or where price resilience is high.”

Some are of the opinion that policies such as additional government regulations are needed as housing prices may soar again, especially in Gangnam, Seoul, if interest rates are lowered in earnest, but experts’ opinions differ.

“Although there is a trend of interest rate cuts and jeonse price increases, household loan regulations are in full swing and price fatigue has built up mainly in areas where prices have soared for a short period of time, such as Seoul, so it is expected that transaction volume and price growth rate will slow down by the end of the year,” said Hamrap, head of the current government. He explained, “I believe that the province is already making its best efforts to improve the polarization of housing prices, such as tax benefits for local second homes for the purpose of improving the living population in areas at risk of depopulation, and tax benefits for unsold homes after local construction.”

Senior expert Park also said, “There is no policy solution that can prevent the polarization of housing prices. Policies such as regulations on land transaction permits in some regions, such as Seoul, are not everything,” adding, “Also, government policy is not supported by demand, transportation, etc. He pointed out, “The development of new local cities should be avoided, as the phenomenon of urban hollowing within local areas may occur, resulting in the death of both new cities and surrounding areas, resulting in only carbon energy being released.”

In the end, the opinions of experts were gathered in one place. There are still limitations in completely resolving this polarization pattern through real estate policy alone. Rather, he added that rather than direct government intervention in the real estate market, there is a need to expand various infrastructure and improve transportation networks, as well as to change perceptions about people who own multiple homes.

Senior expert Park said, “In the end, in order to save the local area, there must be comprehensive discussions outside of real estate, such as revitalizing national universities in the local area and revitalizing the local economy and jobs through relocation of companies to the local area,” adding, “However, this is not an easy task either.” “Especially in the case of companies, it is not easy to induce voluntary relocation unless there are special benefits such as corporate tax reduction, but if the tax reduction is excessive, tax revenue problems may arise, so deliberation is necessary,” he explained.

Lab Director Ham said, “In the future, policy efforts will be needed to reduce the gap in living population and infrastructure with the metropolitan area, such as improving local education and medical infrastructure and creating jobs, as well as real estate policy,” and added, “Taxation measures for buyers of unsold homes, such as exclusion of heavy taxes for multiple homes.” “I think there is a need to expand benefits,” he explained.

Commissioner Lee said, “In the end, the only way to slightly reduce the polarization of housing prices is to provide additional infrastructure to areas with relatively poor infrastructure or to increase accessibility to areas that already have good infrastructure.” “If area A and bad area B are connected through a transportation network, the value of area A will inevitably increase further due to the reflection effect,” he said.

In addition, “Problems such as unsold local units are ultimately due to prices being too high compared to the location or excessive supply in areas with insufficient demand, but excessive government intervention (purchase, etc.) can create a gap with the market and create a wrong precedent.” He added, “Even if a lot of houses are built, if the policy stance of allowing only actual residence and actual demand continues, the rental market may actually collapse.”

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