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Prospects Yoo Sun-jong, Professor of Real Estate Studies, Konkuk University
“Burden of inheritance tax superimposed on the effect of population reduction”
Housing prices like Seoul’s hold due to an increase in the number of households
Professor Sunjong Yoo, Konkuk University
The housing market is mixed. It is difficult to easily determine if the uptrend so far will continue or if the price will go down. However, since there cannot be assets that go up in price forever, one day the housing market will have to adjust.
If the adjustment period comes to this point, it is very likely that it will look different from the past. This is because the population is declining, which is one of the important factors in the growing demand for real estate. Korea’s population, excluding foreign immigration, began to decline since November last year and has been declining for 9 consecutive months through July this year. The total population, including immigrants, is also expected to decline starting in 2029.
How will this demographic change affect the housing market? I asked Yu Sun-jong, professor of real estate at Konkuk University. Professor Yoo is a Japanese expert who received a doctorate in real estate studies in Japan and, in 2018, published a book analyzing the crisis in Korea in light of the case of a declining population in Japan.
The next 20 years, look at mobility over population
▷ If the adjustment in house prices comes sooner or later, a bigger impact is likely due to the addition of population decline.
“The overlap in population decline means more regional variation. However, the population decline by itself does not lead to a decline in overall house prices. Seoul’s population fell from 120,000 in 2015 to 9, 72 million last year. But you know, this time. Didn’t Seoul’s house prices increase more during the bull season? Where there is income and industry, population movement also increases, so it is difficult to lower the housing prices “.
▷ Will the local market get complicated with a weak economic base?
“It must be said that even in the same region, there is a great variation according to the district, even within the same city, according to the district. According to the statistics of the last five years, there are areas with increasing population and areas with decreasing even in the same area. “
▷ If there are variables to consider along with population movement in the era of population decline?
“You have to take into account the number of households. The number of households has increased as the population in Seoul has decreased, as mentioned above. The number of households is already decreasing, but the number of households in Korea is expected to increase. by 2038. Originally, around 2028, the number of households will also decrease. I saw that as a result, but the furniture division was stronger than expected. “
▷ The population decline does not seem to have a significant impact on the real estate market.
“No. Regions with a weak population base will be greatly affected by a small impact. The impact of bad events in the market is inevitably stronger than in the past. It is said that the total population decline is still very away due to the influx of foreigners. Market share is not very large. Market impact is limited to certain regions and, in some cases, can be a negative factor for house prices. When forecasting the real estate market, it’s right to think of foreigners right away. “
“Japan without 20% of the land owner, it is not someone else’s job”
▷ How will it affect the price of land, not housing?
“If you bury it, it will be an old saying. In Japan, land without owner represents 20% of the total area, which is the size of an island in Kyushu. A case where land inherited after the death of one of parents do not surrender because it is not economic. This is the result of the ruling that there is no reason to have an inheritance tax and a property tax, and there are 157 cases of not registering an inheritance for three generations. Similar cases will increase in the future. “
▷ Is the 2018 writing on fat extinction related to this too?
“According to the 2015 statistics, the problem of unoccupied houses was serious. As a result of the analysis of 299 municipalities, we found that 86 municipalities, a third, are facing the danger of extinction. By 2030, there will be no one 30 years or older. less”. Local governments that do not exist will also appear. What does it mean to talk about financial technology with homes or land in such an area? The survival of the local government itself is key ”.
▷ It seems that the local management plan should be changed right now.
“Korean local governments are making urban plans under the premise that the population will continue to increase. In the case of Pyeongtaek, Gyeonggi-do, the current population is 470,000, but they are establishing a basic urban plan on the premise that it will increase to 1.5 million by 2035. All local governments nationwide Most of them are similar, so they develop policies such as the development of large-scale housing and new industrial complexes, etc. Taking into account the population trend, it can be a huge social waste. It is important to manage and reorganize the old town to reduce empty houses. Do. “
Shopping street in the ‘home around’ era
▷ Is it not possible to do a new residential site development?
“New small-scale development of hundreds of generations or less is valid. In Japan, local governments in small and medium-sized cities are already competing for such small-scale development. As the old city center becomes too old, it is planned to develop new small-scale housing sites to attract a younger population. To escape extinction. It is a kind of ‘population war’ between struggling local governments, the strategy of neglecting the old town of the A city where empty houses increase and investing in infrastructure in new lots can become common.
▷ What will happen to the mall?
“For the moment, the ripple effect of the ‘contact’ caused by the corona epidemic will be stronger than the population. Consumption ‘at home’, in which home work is increasing and consumption in central cities such as the city center, flows towards residential areas, is becoming a trend. Even after the crown As the trend is expected to continue, the attention of the business district around the residential area will increase.
▷ If there is a house that is not for sale in an area where the population is declining, what can be done?
“I can think about subscribing to the Korean Housing Finance Corporation’s housing pension product. Since the pension is paid based on present value and can be lived in life, the ease of use of the house and the coverage The risk of falling prices can be enjoyed at the same time. As the burden is piling up on the Korea Housing Finance Corporation, there is concern that this will pose a national burden in the future. “
Reporter Noh Gyeong-mok [email protected]
