6 out of 10 Koreans "Plan to Buy a House in the Second Half of This Year or the First Half of 2023"

0.5%p Increase in Purchase Response Rate Compared to End of Last Year, 0.4%p Increase in Sales as Well

[Asia Economy Reporter Kim Min-young] Six out of ten Koreans responded that they plan to purchase a house in the second half of this year or the first half of 2023.

According to a survey conducted by Zigbang on the 7th targeting users of its application, 64.6% of the total 1,832 respondents said they plan to purchase a house in the second half of this year or the first half of 2023. Since the survey began in 2020, the declining trend in the percentage of respondents planning to buy has stopped, showing a slight increase of 0.5 percentage points compared to the survey conducted at the end of last year.

By residential area, the intention to purchase was highest in the following order: ▲Gyeonggi (66.5%), ▲Provinces (65.6%), ▲Incheon (64.2%), ▲Seoul (62.2%), and ▲Five major provincial metropolitan cities (62.0%). Compared to the survey at the end of last year, the percentage of respondents in Seoul (up 5.0 percentage points) and Incheon (up 2.1 percentage points) who intend to purchase a house increased. Gyeonggi remained the same, while the five major provincial metropolitan cities and provinces showed a lower percentage of purchase intention compared to the end of last year. Zigbang explained that the buying sentiment is stronger in the metropolitan area than in provinces or metropolitan cities.

By age group, the percentage of respondents intending to purchase a house was highest among those aged 60 and above (67.9%), followed by those in their 50s (67.4%), 30s (64.0%), 40s (62.6%), and 20s or younger (52.9%). Compared to the survey at the end of last year, there was a slight increase in purchase intention among those aged 20 or younger, 50s, and 60 and above.

The biggest reason for planning to purchase a house from the second half of this year to the first half of next year was ‘owning a home instead of renting’ (43.1%). The next reasons were ▲moving to a different residential area (19.2%), ▲changing the size of the home (expanding or downsizing) (16.5%), ▲family members other than oneself living there (6.7%), and ▲investment purposes such as capital gains (6.3%).

On the other hand, among the 649 respondents who said they do not plan to purchase a house, the most common reason was ‘house prices are too expensive’ (29.6%). This was followed by ▲expectation that prices will fall in the future (27.0%) and ▲already owning a residence and no intention to buy additional property (17.9%). Some respondents also mentioned waiting to see changes in the new government’s real estate policies (8.6%) and the burden of loan regulations and rising interest rates (7.9%).

When asked about plans to sell a house in the second half of this year and the first half of next year, 41.8% of all respondents answered ‘yes,’ while 58.2% said they had no intention to sell. The percentage of those intending to sell also increased by 0.4 percentage points compared to the survey at the end of last year.

By age group, among respondents who said they plan to sell a house in the second half of this year and the first half of next year, the order was 60 and above (57.8%), 50s (46.0%), 40s (42.5%), 30s (29.2%), and 20s or younger (24.3%). Compared to the survey at the end of last year, the percentage of those intending to sell increased relatively among those aged 20 or younger and those in their 30s.

By residential area, the percentage of respondents planning to sell a house in the second half of 2022 and the first half of next year was highest in Incheon (49.0%), metropolitan cities (44.9%), Gyeonggi (44.1%), provinces (40.1%), and Seoul (35.8%). Among residents in provinces, more than half had planned to sell at the end of last year’s survey, but this year, the majority responded that they do not plan to sell. Meanwhile, the intention to sell increased in Incheon and metropolitan cities, and although the percentages in Seoul and Gyeonggi also rose, the differences from last year’s results were minimal.

Among respondents planning to sell a house in the second half of 2022 and the first half of next year, the most common reason was ‘to move to a different residential area’ (29.9%). This was followed by ▲changing the size of the home (expanding or downsizing) (26.2%), ▲realizing capital gains or changing investment destinations (19.1%), and ▲selling for tax-saving purposes due to the temporary suspension of the heavy tax on multiple home owners’ capital gains tax for one year starting May 10 (13.6%).

Zigbang stated, “While the buying demand remains strong mainly for actual residence and relocation reasons, it is notable that the percentage of metropolitan area residents planning to purchase has increased. The reasons for selling have increased compared to last year, including capital gains realization, changing investment destinations, and tax-saving sales due to the temporary suspension of the heavy capital gains tax on multiple home owners effective for one year from May 10.”

They added, “With recent continuous interest rate hikes, the burden of loan regulations and interest payments has increased, so there may be movements to sell houses or clear listings. The direction of the new government’s real estate policies is expected to determine the future actions of buyers and sellers.”

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