Housing Purchase and Sale Plans Both Reach Highest Level in 2 Years

Survey of 1,056 Zigbang App Users
8.5%p Increase in Responses Planning to Buy Homes Compared to Last Year-End
Both Owner-Occupier and Investment Demand for Home Purchase Rise

In a survey conducted by real estate platform company Zigbang, the proportion of respondents planning to buy or sell a house in the second half of this year or the first half of next year reached the highest level in two years. Although interest rates remain high, the base rate has been frozen three consecutive times, and recent brisk transactions of quick sales have led to a significant recovery in the previously frozen buying sentiment.

[Image source=Yonhap News]

On the 12th, Zigbang conducted a survey of 1,056 app users, revealing that 68.7% of all respondents planned to purchase a house in the second half of this year or the first half of next year. This is an 8.5 percentage point increase compared to the survey results from November last year (60.2%).

By residential area, the intention to purchase was highest in the following order: provinces (74.7%) > Incheon (73.4%) > five major provincial metropolitan cities (68.5%) > Seoul (67.5%) > Gyeonggi (65.4%). Compared to the November survey results, the intention to purchase increased in all regions.

The main reason for purchasing a house was "owning a home instead of renting" at 47.4%. This was followed by △relocation within the residential area (18.2%) △moving to a larger or smaller space (12.6%) △investment purposes such as capital gains (9.7%) △changes in household composition such as merging or splitting households (6.6%) △rental income purposes (2.2%). Compared to the November last year survey, the responses for "owning a home instead of renting" and "investment purposes such as capital gains" increased by 2.5 and 3.5 percentage points respectively, indicating a rise in both owner-occupier and investment purchase intentions.

Among respondents who answered that they had no plans to purchase a house, the most common reason was "housing prices are too expensive" at 31.1%. Although housing prices have been declining since the second half of last year, with low-priced properties being sold out and prices being adjusted downward, there still appears to be a perception among buyers that housing prices are expensive, which discourages purchases. This was followed by △expectation of future price declines (21.1%) △already owning a residence or no intention to purchase additional property (18.4%) △overall economic recession (12.7%) △burden of rising loan interest rates (11.8%).

At the end of last year, "expectation of price declines" was the most common reason at 33.0%. In this survey, it was the second most common response but the proportion significantly decreased compared to the end of last year. As transactions focused on low-priced properties progressed in the first half of this year and some areas showed localized rebounds, concerns about further price declines appear to have somewhat diminished.

Regarding plans to sell houses in the second half of 2023 and the first half of next year, 41.6% of all respondents answered "yes," which is a 1.4 percentage point increase compared to the November survey. By residential area, the intention to sell was highest in the following order: five major provincial metropolitan cities (47.6%) > provinces (47.5%) > Incheon (43.6%) > Gyeonggi (40.0%) > Seoul (34.9%). The intention to sell was relatively higher in provincial areas than in the metropolitan area, which seems to reflect concerns that price weakness will appear later in provincial areas compared to the metropolitan area, where quick sales have already occurred and price recovery is expected.

The main reason for planning to sell a house in the second half of this year and the first half of next year was "relocation within the residential area" at 26.2%. This was followed by △moving to a larger or smaller space (24.6%) △expectation that housing prices will fall (13.0%) △increased burden of loan interest (11.4%) △realizing capital gains or switching investments (10.0%).

On the other hand, the main reason for not planning to sell a house was "living in the house (one household, one house) or not owning a house" at 50.1%, followed by △waiting for the right timing to sell (21.6%) △having to sell at a price lower than the desired selling price (13.9%) △expectation that housing prices will rise or recover (11.0%).

Zigbang identified "interest rate fluctuations" as a key variable that will influence the housing market atmosphere in the second half of the year. However, considering the increased intention to purchase houses compared to last year, it is expected that transactions will continue steadily despite this variable.

Ham Young-jin, head of Zigbang Big Data Lab, said, "Since both owner-occupier and investment demand have increased, although it will not lead to a sharp price rise or surge in transaction volume like in the past 2-3 years, steady transactions are expected mainly in low-priced properties or areas where price recovery is anticipated."

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