The sale price is affected by the Jeonse price for the time being… Concerns about increasing volatility due to regional differences in supply
A government-run research institute predicted that the Seoul real estate market will continue its downward trend for the time being. However, in the case of Seoul, there were also warnings that the housing cost burden could increase due to a decrease in the supply of apartments in the second quarter of this year (April to June).
On the 2nd, the Korea Development Institute (KDI) reported in the ‘Real Estate Market Trend in the 1st Quarter of 2022’, “In the future, the housing market will continue to face downward pressure on the buying and selling and jeonse market due to interest rate hikes nationwide. Market volatility is likely to increase.”
KDI said, “In the future, the influence of the jeonse market on the trading market is expected to expand further amid high uncertainty due to a mix of upstream and downstream factors in the Seoul trading and jeonse market.”
The downward pressure on the housing market suggested by KDI is the possibility of a rate hike. KDI analyzed, “As interest rates continue to rise this year, it is expected to exert downward pressure on the buying and selling and jeonse markets nationwide.” On the other hand, as an upside factor, he said, “As the number of occupants in Seoul and Gyeonggi Province is gradually reduced, the jeonse price and sale price may rise.” 9000),” he said. This means that the price may be raised as supply is expected to be low in the second quarter.
KDI predicted that for the time being, housing sales price will be greatly affected by the Jeonse price. KDI said, “From 2020, the direction and range of fluctuations in the increase rate of the purchase price and the increase in the jeonse price have become more synchronized than in the past. said
He continued, “The possibility of additional upward pressure on the demand side is not high in the trading market for the time being due to fatigue from the steep rise in the (recent) five years, high household debt-to-income ratio, and stock price decline. will have a significant impact on the
Supply is expected to increase slightly compared to last year. This means that prices are unlikely to rise in terms of supply factors. However, he observed that the volatility of the Jeonse price could increase due to the difference in supply by quarter.
KDI judged that the current housing market in Seoul has entered a phase of adjustment. According to KDI, the apartment sale price index in Seoul fell 3.6% in February this year compared to October 2021. KDI said, “Prices fell in all areas except for the downtown area (0.7%), including the southeast area (-3.2%), the southwest area (-2.1%), and the northwest area (-3.1%). -6.1%) showed a large drop in price.”
Sejong = Reporter Kim Hyung-min [email protected]