"House Prices Continue Strong Stability... The First Half of Next Year Is a Turning Point"

Real Estate Expert's Housing Price Diagnosis
Seoul Apartment Prices Stable for 3 Weeks
Trading Plummets Amid Continued Wait-and-See Attitude
Premature to Judge Market Stabilization
Gangnam Record Prices Likely to Continue
Listings Expected to Increase... Focus on First Half of Next Year

[Asia Economy Reporters Inho Yoo, Yuri Kim, Moon Jae-won] 'Is this a turning point or just a temporary pause.'

The steep upward curve of housing prices is showing signs of change. According to major statistics such as the Korea Real Estate Board, apartment prices in Seoul have entered a stable phase, while record-high transactions continue mainly in some Gangnam areas. On the other hand, there are also urgent sale listings with reduced prices.

Experts point out that it is premature to view the recent stability as a turning point. Despite the government's multiple regulations, the market trend of investing in a single, well-located property is strengthening, supported by abundant liquidity due to the low interest rate environment. Multi-homeowners, who hold the key to the market, also seem to be waiting and watching the situation until the first half of next year, strengthening the outlook for a firm but stable market.

The market is currently stable amid cautious observation

According to the Korea Real Estate Board on the 16th, Seoul apartment prices have maintained a stable increase rate of around 0.01% for three consecutive weeks from the 24th of last month to last week. In the four Gangnam districts, Seocho-gu and Songpa-gu have recorded a stable rate (0.00%) for five consecutive weeks, while Gangnam-gu has shown a stable fluctuation rate of about 0.01% for five weeks. Non-Gangnam areas have also recently reduced their increase rates to within 0.02% or stable levels.

The cautious stance amid a sharp drop in transactions is also noteworthy. According to the Seoul Real Estate Information Plaza, the number of apartment transactions in Seoul last month was 3,992, a sharp decrease of about 38% compared to 10,647 in July. Compared to 6,606 transactions in August last year, this year's August transaction volume is about half. According to the housing price trend released by KB Real Estate Live On on the 13th, the Seoul apartment buyer dominance index dropped 5.3 points from 101.5 the previous week to 96.2, falling below the baseline of 100 for the first time in three months. An index below 100 means that sellers outnumber buyers.

Senior Research Fellow Doosung Kyu of the Korea Construction Industry Research Institute said, "Because the burden of capital gains tax and property tax has increased, it is difficult to find motivation for transactions under the current circumstances," and predicted, "The cautious stance will be maintained to the point of boredom." However, some argue that it is still too early to discuss a clear direction. Jin-hyung Seo, President of the Korea Real Estate Society (Professor at Gyeongin Women's University), diagnosed, "Statistics show that the number of transactions has halved, creating a distorted phenomenon that makes the market appear stable," and added, "We need to observe further whether the current stability will continue."

'Urgent sales and record-high transactions' abnormal phenomena

Experts expect that the series of record-high transactions in the Gangnam area will continue for the time being. Jae-hyun Jang, Head of Research at Real Today, said, "Record-high transactions occur because price adjustments are not being made in the asking prices themselves," and added, "Record-high transactions can continue steadily for the time being."

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, the Helio City in Garak-dong, Songpa-gu recently recorded a new high with a sale price of 1.97 billion KRW for an 84㎡ (exclusive area) apartment. In April and May, the price was in the 1.6 billion KRW range. Trizium in Jamsil-dong, a land transaction permission zone (84㎡ exclusive area), was traded at a record high of 2.2 billion KRW last month, nearly 100 million KRW higher than the 2.1 billion KRW level in July. In Apgujeong-dong, Gangnam-gu, where expectations for reconstruction are spreading, all three transactions last month for 156㎡ apartments in Hyundai recorded new highs in the 4 billion KRW range.

Researcher Eun-hyung Lee of the Korea Construction Policy Research Institute predicted, "The situation where prices rise despite reduced transaction volumes will continue throughout the second half of the year." Youngjin Ham, Head of the Zigbang Big Data Lab, also forecasted, "In the three Gangnam districts, prices will maintain a firm and stable trend as abundant market liquidity and actual demand continue to flow in."

The first half of next year as a turning point

Experts expect the current cautious stance to change around the first and second quarters of next year. This is because multi-homeowners may start to actively put properties on the market next year to avoid the increased capital gains tax and comprehensive real estate tax rates applied from June next year.

Ji-young Yang, Director of Yang Ji-young R&C Research Institute, said, "Since pre-sale applications for the 3rd phase new towns will begin from July next year, many purchase demands will shift to waiting for pre-sale, and buyers are also waiting for price adjustments due to the sharply increased housing prices," adding, "We need to watch how many multi-homeowner properties will come out in the spring of next year."

Dae-jung Kwon, Professor of Real Estate at Myongji University, said, "Some properties will come out before the capital gains tax surcharge exemption period ends in the first half of next year," but predicted, "Due to supply shortage issues, a firm and stable market will be maintained afterward."

However, there are also forecasts predicting an overall price decline. Jaeman Lim, Professor of Real Estate at Sejong University, said, "High-priced homes are unlikely to fall easily due to the preference for a single well-located property, but mid-to-low priced homes may see price drops due to multi-homeowner or corporate sales," and expected that housing prices will generally show a downward trend for the time being.

This content was produced with the assistance of AI translation services.