[ad_1]
Land, Infrastructure and Transportation Research Institute Apartment price bubble verification report
Relationship between trading price and intrinsic value
Gangnam 4-gu 214%, Sejong 208%
Appears 180% in Seoul as a whole
Rating 50-80% higher than other regions
Seoul Jamsil Apartment Complex. Yunhap news
A report from a state research institute came to light that bubbles (bubbles) appeared in apartment prices in Seoul and Sejong City, including ‘Gangnam 4-gu’ (Gangnam, Seocho, Songpa, Gangdong-gu ), where expensive houses are concentrated. The so-called ‘Seven Bubbles’ (Gangnam, Seocho, Songpa, Mokdong, Bundang, Pyeongchon, Yongin), which had skyrocketed apartment prices in the mid-2000s, had suffered a period of decline in apartment prices. housing since 2008. Gu and Sejong City are also attracting attention by suggesting the possibility of taking similar trains. Researcher Jin Choi from the Housing and Land Research Division of the Korean Institute of Land, Infrastructure and Transportation analyzed apartment prices in metropolitan and provincial areas and Gangnam 4 districts in Seoul in the working paper ‘Verification and Implications of the Apartment Price Bubble ‘released on February 24. It was revealed that there was a high possibility of price bubbles in city apartment prices. Researcher Choi calculated the intrinsic value of homes by city and province using average price data from the Korea Appraisal Board from January 2012 to January this year, and calculated the level of the sale price compared to the intrinsic value. . The intrinsic value of a house was calculated by applying the rent to cheonsei by region ratio to the price of cheonsei to obtain rental income and then applying a social discount rate (4.5%). As a result, Seoul and Sejong City, including Gangnam 4-gu, were found to be more valued than other regions. In December of last year, the ratio of commercial price to intrinsic value was 213.5%, 208.5% and 179.8%, respectively, in 4 districts of Gangnam, Sejong and Seoul. During the seven years from 2012 to last year, this rate increased 69.9 percentage points from 109.9% to 179.8% in Seoul, 84.7 percentage points from 128.8% to 213.5% in the boroughs Gangnam 4 and 103.5 percentage points from 105.0% to 208.5% in Sejong. In these regions, the trading price compared to intrinsic value using the Korea Appraisal Board’s actual transaction price index was also high: 174.2% in Gangnam District 4, 166.0% in Sejong and 193.3% in Seoul. In contrast, the relationship between the sale price (average price applied) and the average intrinsic value of six metropolitan cities as of December of last year was 131.1% and 123.7% in eight provinces. Compared to this, house prices in Seoul, Gangnam 4-gu, and Sejong are 50-80% higher than in other regions. Researcher Choi said: “There is a foreign research case that shows that if the trading price increases by more than 20% compared to the intrinsic value, it can be seen as a bubble, but it is difficult to directly compare it with Korea, which has a charter system “. “After Corona 19, the real economy and the asset market In a situation where the temperature difference increases, price bubbles can have a significant negative impact on the economy, so the government must consistently implement policies to stabilize the real estate market “. Meanwhile, the sale price of apartments in Seoul this week (as of the 21st) announced by the Korea Appraisal Board on the same day increased 0.01% from last week, only rising slightly for 5 weeks consecutive. In particular, the Gangnam District 4 sale price has been unchanged for 7 consecutive weeks (0.0%). The appraisal read: “Amid the continuation of the government government tax due to the impact of the supply measures of July 10 and August 4, and concerns about the economic contraction caused by Corona 19, the price rose slightly, mainly for small and medium-sized apartments with less than 900 million won. ” By Choi Jong-hoon, Staff Reporter [email protected]
[ad_2]
