Housing Prices in the Second Half of the Year Likely to Rise Temporarily Due to Regulatory Easing

Short-term Upside Potential in Second Half
Development Prospects Expected in Ilsan and Gangnam

Photo by Yonhap News

Despite the Yoon Seok-yeol administration's supply policies, a short-term rise in housing prices in the second half of the year appears inevitable. Housing prices are fluctuating mainly in related complexes amid growing expectations of deregulation.

According to the 'April 2022 Consumer Sentiment Survey Results' released by the Bank of Korea on the 27th of last month, the housing price outlook index recorded 114, up 10 points from the previous month. The housing price outlook index, which forecasts housing prices one year ahead, fell below 100 in February (97) but rebounded to 104 in March after the presidential election, continuing an upward trend for two consecutive months. An index above 100 means that more surveyed households expect housing prices to rise, while below 100 indicates more expect a decline.

With President-elect Yoon pledging deregulation measures such as easing restrictions on reconstruction projects, enacting a special law for first-generation new towns, and normalizing real estate taxation, market expectations are rising. According to the Seoul Real Estate Information Plaza, reflecting market expectations for the Yoon administration's policies, the number of apartment sales transactions in Seoul in March was 1,426, a 76.05% increase compared to 810 transactions in the previous month.

Additionally, housing prices are steadily rising, especially in areas with development prospects. According to the Korea Real Estate Board, the weekly apartment prices in Yongsan-gu, where expectations for regional development are high due to the relocation of the presidential office, rose 0.03% compared to the previous week, continuing the upward trend. Gangnam also saw a 0.03% increase compared to the previous week, mainly in medium to large-sized properties in Daechi and Dogok-dong, and first-generation new town reconstruction expectations similarly boosted prices in Bundang (0.05%) and Ilsan (0.04%) complexes.

In fact, Shinhyundai 12th Complex in Apgujeong-dong, Gangnam-gu (155.52㎡) was sold for 5.9 billion KRW last month, marking an 800 million KRW increase in just one month and setting a new record for actual transaction prices. Similarly, Gangchon Donga (154.02㎡) in Madu-dong, Ilsan, Goyang-si, was traded last month for 1.1 billion KRW, 100 million KRW higher than two months ago. A representative from a real estate agency in Madu-dong said, "Although there is uncertainty about first-generation new town policies, sellers' expectations remain high."

Yoon Ji-hae, chief researcher at Real Estate R114, stated, "Unlike the first half of the year, the policy direction such as deregulation is becoming clearer in the second half, increasing the likelihood of price rises. Since supply and demand issues are difficult to improve immediately in the second half, demand in urban areas remains strong, so the price increase range is expected to expand."

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