71% of Household Heads Expect House Prices to Rise or Stay the Same Next Year... Only 8.2% Forecast a Decline

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seon-hee] More than 70% of household heads in Korea predicted that house prices would either rise or remain unchanged one year from now.

According to the recently released "2021 Household Financial Welfare Survey Results" report jointly conducted by Statistics Korea, the Financial Supervisory Service, and the Bank of Korea, 35.6% of household heads answered that house prices in their residential area would "rise" one year later. Another 35.3% responded that there would be "no change."

The survey was conducted as of March 31. Despite the government rolling out various supply measures since the beginning of the year, about 71% of household heads expected house prices to either remain stable or increase.

On the other hand, only 8.2% of household heads anticipated a "decline," while 20.9% answered "don't know."

This trend shows a significant change compared to the previous survey in 2020. In the 2020 survey, the response rate for "will rise" was around 23%, which increased by 12.6 percentage points in one year. Conversely, the "will decline" response dropped by 5.4 percentage points from 13.5% to 8.2%. The proportion of those who answered "no change" also decreased by 7.8 percentage points from 43.1%.

In other words, compared to one year ago, the proportion of household heads expecting house prices to fall or remain the same has significantly decreased, with most of them shifting to a "house price increase" outlook.

This trend also appeared in responses to questions about preferred methods of managing surplus funds when household income increases. The proportion of domestic household heads who preferred "real estate purchase" as a method of managing surplus funds rose by 3.1 percentage points from 24.0% in 2020 to 27.1% in 2021.

Meanwhile, as of the end of March, the average assets of domestic households were 502.53 million KRW, marking a 12.8% increase compared to one year earlier. This is the first time the average household assets have exceeded 500 million KRW. This is analyzed as an effect of the sharp rise in real estate prices, which significantly increased households' tangible assets.

Lim Kyung-eun, Director of Welfare Statistics at Statistics Korea, stated, "The asset growth rate recorded an all-time high of 12.8%," adding, "Real estate prices also saw a record increase of 14.8%."

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