There is an analysis that only rent prices are rising as the forecasts for next year’s housing prices are polarizing. This is because the number of people who are unable to find the right time to buy a house and are looking to rent it out is increasing.
According to the real estate industry on the 21st, the increase in housing rental prices announced by public and private real estate statistical organizations is exceeding the increase in sale prices. In October’s national housing price trend recently released by the Korea Real Estate Board, the rental price in the metropolitan area increased by 0.65% and Seoul by 0.41% compared to the previous month. During the same period, sales prices increased by 0.32% in the metropolitan area and 0.25% in Seoul, and the range is much narrower than the jeonse price. The Real Estate Institute explained that in the case of Seoul, the number of leased properties is decreasing and prices are rising, mainly in preferred complexes in the region, due to the demand for relocation and school districts.
Statistics from Real Estate R114, a private research institute, also show the same trend. Looking at the weekly trend as of the 17th, the sale price of apartments in Seoul remained flat for two weeks in a row, while the rental price rose 0.02%. Jeonse prices have been rising for 14 weeks since mid-August.
Yeo Kyeong-hee, senior researcher at Real Estate R114, said, “It is believed that timing the purchase due to the burden of house price fluctuations also had an effect on the increase in jeonse demand,” adding, “The jeonse demand for apartments has also increased due to the lower jeonse price compared to the previous high point, stable loan interest rates, and low risk of reverse rent.” did.
The reason why jeonse prices are rising is due to the mentality of ‘let’s buy a jeonse first because we don’t know what the house price will be like in the future.’ In fact, in the current real estate market, experts’ forecasts for next year’s house prices are very different. First, the analysis is that an upward trend will occur as rental prices and supply shortages become highlighted. This means that if the rental price rises, the gap with the sale price will eventually narrow, and if so, buyers of their own home will start buying. In addition, real estate R114 announced that next year’s apartment occupancy in Seoul was 10,921 households, the lowest level since 2000.
Park Hap-soo, an adjunct professor at Konkuk University’s Graduate School of Real Estate, said, “‘Supply shortage’ will be the biggest topic in the real estate market next year. Considering the fact that rent prices are rising, there is a greater possibility that house prices will rise.”
On the other hand, there is also a somewhat shocking analysis that predicts that house prices will fall by up to 30% compared to now in the long term. The ‘2024 Real Estate Market Outlook’ report recently released by Kyobo Securities predicted that apartment prices in Seoul and the metropolitan area will fall by more than 5% next year. This means that the actual transaction price will fall sharply after last month due to the combined effects of policy loans such as the special home loan being terminated, rising market interest rates, and increased supply. Regarding supply, Kyobo Securities believes that the supply in the metropolitan area has exceeded the appropriate demand by 66,000 households since 2010.
Baek Gwang-je, a senior researcher at Kyobo Securities, said, “The importance of interest rates as a major variable in housing price fluctuations is gradually becoming known to the market, but the application of actual interest rates has not yet been fully reflected in the price.” He added, “The current interest rate situation is prolonged, and the implied rate of return and safe asset rate of return is “Considering the reversal, additional downward pressure of approximately up to 30% compared to the current price and up to 50% compared to the peak will continue in the long term.”
