"Next Year’s Housing Market Expected to Continue L-Shaped Sideways Trend"

Geonjeongyeon to Hold Next Year's Construction and Housing Market Outlook Seminar
Annual Construction Investment Expected to Decrease by 2.4%

"The housing market next year is expected to continue in an L-shaped sideways trend."

The Korea Construction Policy Research Institute (hereinafter referred to as KCPRI) held the '2024 Construction and Housing Market Outlook Seminar' on the 21st, defining next year's housing market as a recession-type stable state and presented this analysis.

View of Seoul apartments from the 63 Building observatory. Photo by Hyunmin Kim kimhyun81@

Research Fellow Kwon Joo-an stated, "Despite the government's active efforts to improve regulations in 2023, the housing market experienced a 'complex recession' with both demand and supply declining due to worsening economic conditions such as high interest rates," and added, "Next year's housing market will inevitably see an 'L-shaped sideways trend' as weak demand continues, supply conditions worsen, and market expansion slows."

He continued, "Given the market conditions, housing prices, transactions, and supply are all expected to show slight declines, with limited increases of around 1% in sales and 2% in jeonse (long-term lease) prices for apartments in the Seoul metropolitan area. Therefore, to normalize the housing market, it is necessary to establish a foundation for demand recovery, which is the market's driving force, along with a reexamination of supply regulations."

Next year, the domestic construction industry is expected to see a 2.4% decrease in annual construction investment as sluggish leading indicators are fully reflected in the market.

Research Fellow Park Seon-gu analyzed, "Negative growth in the construction industry next year is inevitable, and if negative factors such as financial market instability, supply disruptions of production factors, and rising construction costs become more prominent, the recession will deepen further."

He also said, "Due to the time lag effect of construction volume, leading construction indicators are likely to hit their lowest point next year, while lagging indicators may bottom out in 2025," and predicted, "Overall recovery in the construction industry will only be possible with stabilization of macroeconomic conditions such as high interest rates and high inflation."

Director Kim Hee-soo stated, "2024 will be a period of greater uncertainty than ever for both the construction and housing markets, so policy attention and support are urgently needed," adding, "As the construction recession prolongs and the housing market freezes, individual companies must prioritize risk management in their operations, and the government needs to respond swiftly to expand investment and resolve financial market instability."

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