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Eight out of 10 real estate experts predicted that home prices will continue to rise this year. New apartments in Gangnam, Seoul and Ma, Yongsan and Seongdong (Mapo, Yongsan and Seongdong-gu) are expected to lead the uptrend within three years. This is the result of a survey conducted by the Korean Economic Daily on ‘Real Estate Market Outlook and Investment Strategy for 2021’ addressed to 100 real estate experts on the 26th and 30th of last month.
42% of those surveyed predicted that the sale price of apartments nationwide would increase by 3-5% this year. Adding ‘1 ~ 2% increase’ (27%) and ‘5% or more increase’ (10%) means that 79% of the total expect strong trade prices. In a survey conducted in September last year, the most common was 50%, but the atmosphere changed after three months. Only four experts (4%) predicted a price drop. Lee Sang-woo, CEO of Invade Investment Advisory, explained: “Factors that stimulate the sale price, such as tight supply and tax regulation, will have a direct impact on the real estate market this year.”
Jeonse prices are also expected to increase along with commercial prices. 95% of those surveyed predicted an increase in jeonse prices this year. The ‘3 ~ 5% increase’ was the maximum at 38%, and the ‘1 ~ 2% increase’ and ‘more than 5% increase’ were 34% and 23%, respectively. It is analyzed that the storm will continue this year after the application of the new law for the protection of leases as the right to request the renewal of the contract.
36% of experts cited “a new apartment within three years of moving in” as a promising investment this year. This was followed by ‘construction and remodeling’ (31%), ‘small and medium buildings’ (10%), and ‘land near development sites like Sejong city’ (9%). The reason for the recommendation was that the value of the new apartment shortage increased due to a shortage of supply and the continued preference for rented apartments. Kwak Chang-seok, CEO of City and Space, said: “Since the second half of last year, there is a shortage of new apartments on the jeonse market.” He predicted that “the new apartments will drive the price increase in the general sales and jeonse market this year.”
Reconstruction and redevelopment, which are traditional real estate investment products, are assessed to remain attractive. Experts cautioned that it is advantageous for the homeless to actively focus on increasing public sales volume, such as pre-subscription to the third new city in the second half of the year.
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“I rush to prepare my house using the subscription book, as special supplies.”
Real estate experts advised that end-users prepare a home by special supply for the first time in their life for newlyweds, priority supply to the third new city and quick sales in the first half of the year before the increase of the property tax. property. It means that end users should start building my own house in a quarter, as the increase in apartment sales and rental prices across the country can be prolonged.
This year new apartments were selected within three years of move-in as a promising destination for real estate investment. There were many opinions that small and medium-sized buildings, which are relatively free from restrictions on rebuilding and remodeling and loans and property tax, are also worth an investment.
“Both sales and charter flights will increase this year”
As a result of a survey of 100 real estate experts conducted by the Korean Economic Daily, 95% of respondents expected the rental price of apartments across the country to increase this year. The most frequent ‘3 ~ 5% increase’ was 38%. Then, the proportion of “1 ~ 2% increase” was expected to increase by 34% and “more than 5%” was 23%.
About half of the experts (48.4%) predicted that the increase in the total price will continue until the end of the year at least. 25.3% responded that the upward trend will continue for two years until the second half of next year. Hak-Ryeol Kim, director of the Smart Tube Real Estate Research Institute, said: “This year, the number of occupants will be cut in half and the rental registration system will be implemented from June.” . Jae-Hyun Jang, director of Real Today, said: “The fallout from the application of the Lease Protection Law continues, and it takes at least two years for government supply policies such as public pre-sale to enter into force. Until then, it is difficult to expect stability in the jeonse market. “
There was an overwhelming majority of prospects that the trading price would also increase thanks to the increase in the jeonse price. 79% of all respondents predicted that this year’s sales price went up. ‘ “3 ~ 5% increase” was the most frequent at 42%. This was followed by a ‘1 ~ 2% increase’ (27%) and a ‘5% or more increase’ (10%). EAR Research CEO Hong Chun-wook said: “Since there is a lot of demand for jeonse, it is difficult for the commercial price to fall easily.”
“New apartment is the best investment”
New apartments were the most chosen as promising investment destinations this year. 36% of respondents recommended investing in a “new apartment in 3 years”. They then cited ‘construction and remodeling’ (31%) and ‘small and medium buildings’ (10%). “The reason the pre-sale market has enjoyed a boom in recent years is due to concerns that new supply from the private sector will decline,” said Kwon Il, head of the real estate information research team. . City and Space CEO Kwak Chang-seok predicted that “the price will continue to rise due to the high demand for rentals for new apartments.”
Reconstruction and remodeling are assessed to remain attractive. However, experts point out that there is political uncertainty and it is necessary to address them selectively. Myung-sook Ahn, director of Woori Bank’s Real Estate Investment Support Center, predicted: “This year there will be elections for the mayor of Seoul, so the supply tone for maintenance projects may change.” Lee Joo-hyun, CEO of Wolcheonjae Tech, said: “We can tackle the public redevelopment, which is ready to be revitalized at the government level, according to the conditions.”
However, Ji-hae Yoon, Senior Researcher at Real Estate 114, advised: “If it is not a complex, whether it is in the second half of the project, whether it is reconstruction or redevelopment, it is necessary to consider the fact that funds can be immobilized for a considerable period of time “.
“If you are a real consumer, you are more likely to own a home in the first quarter.”
As for the items requesting promising investment areas, 35% of the experts chose Gangnam 4 districts, such as Gangnam, Seocho, Songpa and Gangdong-gu, Seoul. Next, ‘Ma, Yong, Seong (Mapo, Yongsan, Seongdong-gu)’ and ‘Su, Yong, Seong (Suwon, Yongin, Seongnam)’ received 20% and 19% respectively.
Although various regulations, such as the land transaction permit system, have been concentrated in Gangnam, it is a sign that it will become the epicenter of the national rise in house prices. Since the end of last year, investment demand has exploded and reports are updated one after another. The center’s director, Ahn Myung-sook, said: “Last year, prices in unregulated areas and mid- to low-priced complexes were remarkable,” he said. “But now the perception that Gangnam, which could not go up much due to regulation, is spreading.” Lee Wol-moo, CEO of Mid-Me Networks, predicted: “The trend towards preference and the polarization of ‘smart’ will lead to liquidity in Gangnam, allowing further increases.”
Director Kim Hak-Ryeol said, “If the rise in house prices starts in Gangnam, the next feeding of Ma, Yong and Seong will increase, gradually expanding the area and spreading them out.” “As house prices in Gangnam are on fire again, I am concerned about house price anxiety across the country.” .
There were many opinions that end users would rush to prepare their own home as the commercial price and the rental price increased together. 47% of those surveyed said it is most advantageous to fix a house within the first quarter of this year. Team leader Kwon Il said: “It is worth targeting quick sales in the first half of the year due to tighter regulations, such as an increase in the tenure tax.” Director Jang Jae-hyun said, “As of this year, the threshold for special supply has been lowered, and public sales are increasing in the third new city, Yongsan maintenance window, etc.” However, 26% of the experts ordered “to postpone the purchase of a house for the moment.”
Reporters Yoo-jung Lee / Yeon-il Jeong / Jung-cheol Bae [email protected]
