Experts Speak in Unison: "House Prices Will Rise in the Second Half of the Year"

Supply Shortage Persists Due to Market Regulations
Jeonse Crisis Becomes Reality... Will Push Up Sale Prices

[Asia Economy Reporter Kangwook Cho] Real estate experts unanimously predicted that house prices will continue to rise and the Jeonse rental crisis will persist in the second half of the year. They agreed that ongoing government regulations on the real estate market and a continued shortage of supply will intensify the Jeonse crisis, putting upward pressure on prices in the sales market as well. ▶Related article on page 3

On the 28th, Asia Economy surveyed 10 real estate experts about their outlook on house prices and Jeonse prices for the second half of the year. All respondents answered that house prices will rise and the Jeonse crisis is inevitable, continuing the trend from the first half. Although there were slight differences in responses such as ‘strong’, ‘rising’, ‘firm’, and ‘rising then adjusting’, none predicted a price decline. Experts pointed out that while demand for purchases is increasing due to the Jeonse crisis, there is a general lack of listings in both sales and Jeonse markets. In particular, concerns were raised that the polarization between Seoul and other regions will deepen as the upward trend centered on Seoul becomes more pronounced.

Seojinhyung, president of the Korea Real Estate Society and professor at Gyeongin Women’s University, said, “The imbalance between supply and demand will continue to drive price increases,” adding, “Especially regulations on multi-homeowners and reduced supply in Seoul will influence prices to rise mainly in Seoul, further worsening the polarization between Seoul and other regions.”

All respondents also emphasized a ‘strong rise’ outlook for the Jeonse market. There were significant concerns that the Jeonse crisis is imminent. This is because the volume of Jeonse move-in units is even lower than last year, and the shift from Jeonse to monthly rent is shrinking the available supply. It was also pointed out that the rise in Jeonse prices will create a vicious cycle pushing up house prices.

Professor Shim Gyo-eon of Konkuk University’s Department of Real Estate explained, “Concerns about the Jeonse crisis will become a reality,” adding, “The Jeonse shortage that began after the implementation of the Lease Protection Act last year continues with no resolution. Supply is not increasing, so the market’s upward trend is expected to strengthen.”

However, considering the possibility of interest rate hikes and fatigue from rapid price increases, some forecasts suggested that the rate of increase will be more limited than in the first half. Park Wongap, senior real estate specialist at KB Kookmin Bank, said, “The upward trend will continue, but the metropolitan area may see a rise in the first half followed by a decline in the second half,” adding, “If the amount of increase is large, even if prices rise equally, the rate of increase will be lower. Combined with fatigue from the rapid rise in the first half and the possibility of interest rate hikes in the second half, the extent of the price increase will be reduced.”

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