"When Can We Buy a House?" Housing Prices Expected to Rise Again This Year... Citizens Sigh

Weekly Apartment Price Trends by Korea Real Estate Board
Housing Price Outlook Index Hits Another Record High
Construction Economy Research Institute "Jeonse Crisis to Continue Until 2022"
Experts "Effective Measures Like Supply Expansion Needed"

The index forecasting further increases in housing prices reached its highest level since statistics began in January 2013. Photo by Yonhap News

[Asia Economy Reporter Kim Suwan] "These days, no one dreams of owning a home with current house prices," "I don't even hope to buy; I just wish there were more jeonse listings."

Despite the recent domestic economic downturn, housing prices continue to soar, deepening the sighs of ordinary citizens. Last year, the real estate market showed little effect despite the government's 24 rounds of intensive measures, and the situation worsened as it led to a shortage of jeonse and monthly rent options. Experts analyze that stabilizing the real estate market will be difficult unless the fundamental causes are addressed.

Apartment prices are steadily rising not only in Seoul and the metropolitan area but also in provincial regions.

According to the weekly apartment price trend for the third week of December (as of the 21st) announced by the Korea Real Estate Board on the 24th of last month, nationwide apartment sale prices rose by 0.29%, and jeonse prices increased by 0.30% compared to the previous week. Apartment sale prices in Seoul rose by 0.05%, marking the 28th consecutive week of increase.

The metropolitan area also recorded 0.22%, up 0.02 percentage points from the previous week (0.20%). Both Incheon (0.15%→0.22%) and Gyeonggi (0.30%→0.31%) saw larger increases. Nationwide apartment jeonse prices have been rising for 68 consecutive weeks, and Seoul apartments for 78 consecutive weeks.

Expectations that housing prices will rise further continue to break historical records. According to the 'December Consumer Sentiment Survey' released by the Bank of Korea on the 29th, the December Housing Price Outlook CSI (Consumer Sentiment Index) recorded 132, up 2 points from the previous month. This marks the highest level for two consecutive months following November.

The Housing Price Outlook CSI is a survey of opinions on house prices one year ahead, indicating that among respondents, the number expecting housing prices to be higher in one year increased compared to the previous month.

In response, the government introduced strong regulatory measures, including the three lease laws (right to request contract renewal, rent ceiling system), but housing and jeonse prices remain difficult to control. This is due to speculative demand moving to non-regulated areas on the outskirts of Seoul, causing a so-called "balloon effect" where nearby area housing prices rise.

As the prospect that the jeonse housing shortage is likely to continue until 2022 emerges, the concerns of low-income households without homes are deepening. Photo by Yonhap News

Given this situation, pessimistic voices are emerging among non-homeowning ordinary citizens facing continuously rising house prices: "I won't even dream of owning a home for the next few years," "I don't even have a jeonse or monthly rent place, so how am I supposed to live?" "I have to move soon, but there are no jeonse listings now, so I can only sigh," "Even with a 100 million won loan, I can't buy a house in Seoul."

Meanwhile, as forecasts suggest that the jeonse crisis worsening the suffering of non-homeowning citizens may continue until 2022, urgent measures are needed.

The Korea Construction Industry Research Institute (KIC) released a report last month titled 'Evaluation and Tasks of the November 19 Jeonse Measures.' The report stated, "The recent problem in the lease market is instability in the apartment jeonse market. With a decrease in apartment completions, rapid policy changes have reduced existing apartment jeonse supply, and with limited policy tools, the shortage of apartment completions until 2022 is likely to prolong jeonse instability," adding, "A comprehensive consideration of the connection between sales and lease markets is urgently needed."

Experts advise that resolving supply issues should be prioritized to stabilize the real estate market.

Professor Kim Taegi of Dankook University's Department of Economics said, "The rapid rise in house prices leads to jeonse and monthly rent crises, creating a vicious cycle," and pointed out, "The government is using coercive measures to lower real estate prices, which may have temporary effects, but the fundamental cause lies in supply suppression, so it cannot overcome the actual market supply-demand situation."

He added, "If the government does not present effective measures such as expanding supply in real estate policy, this situation will inevitably continue."

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