Has the housing price bottomed out? 6 out of 10 say 'Not yet'

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Amid heated debates about whether housing prices have bottomed out recently, a survey revealed that 6 out of 10 people believe housing prices will fall further. Although apartment transaction volumes have increased compared to the end of last year, they have not recovered to the average levels of previous years, and prices continue to decline, indicating that the majority do not see this as the bottom. Accordingly, in a situation where the direction of housing prices is unclear, it has been analyzed that prospective homebuyers preparing to purchase a home should focus more on listings in individual complexes rather than the overall market trends.

According to a survey conducted by Zigbang on the 10th targeting 1,931 users of its app to gather opinions on the current state of housing prices, 58.5% of respondents answered, "It is not the bottom yet. Prices seem likely to fall further." On the other hand, 41.5% of respondents believed, "It is the bottom. Prices will soon rise or remain stable." This means that 6 out of 10 respondents expect current housing prices are not at the bottom and will decline further. Specifically, among those who think it is the bottom now, 14.9% expect prices to rise ("increase"), while 26.6% believe it is the bottom but prices are unlikely to rise yet ("stable").

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The most common reason for believing that housing prices have not yet bottomed was "the price increases over the past 1-2 years have not fallen enough," accounting for 24.4%. This was followed by ▲ overall poor economic conditions (22.7%) ▲ the impact of unsold inventory backlog and sluggish pre-sale market sentiment (21.5%) ▲ expectations that interest rates will continue to rise (19.6%) ▲ more sellers than buyers in the market (10.1%).

Conversely, the top reason for believing that housing prices have bottomed and are likely to rise was "an increase in urgent sales transactions and depletion of listings," at 28.1%. This was followed by ▲ prices having fallen enough compared to the peak (24.0%) ▲ easing of interest rate hikes (23.3%) ▲ rising asking prices and actual transaction prices (13.2%) ▲ effects of government deregulation (10.4%).

Among those who think prices have bottomed but are unlikely to rise yet, the most selected reason was "increased wait-and-see attitude due to future interest rate fluctuations" (40.1%). This was followed by ▲ continued wait-and-see between sellers and buyers after urgent sales transactions (36.4%) ▲ the fact that transaction volume and price increases are limited to certain regions or complexes (23.5%).

[Image source=Yonhap News]

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When asked about the expected timing of a housing price rebound, 44.7% answered "after 2025," the highest proportion. This was followed by ▲ 2024 (33.9%) ▲ Q4 2023 (13.6%) ▲ Q3 2023 (5.8%) ▲ Q2 2023 (2.0%). This means 8 out of 10 respondents expect housing prices to rebound next year or later rather than this year.

The survey suggests that expectations for a market upswing in the near term remain low. However, Zigbang advised that since some regions and complexes are showing price rebounds after urgent sales transactions, prospective homebuyers should monitor price levels in individual complexes rather than overall market trends.

Ham Young-jin, head of Zigbang Big Data Lab, said, "For those preparing to buy a home, it would be good to focus on individual listings rather than the overall market movement," adding, "It is important to consider how much prices have adjusted compared to the peak, the trend of interest rate changes which could significantly affect loans, and the recent deregulation changes, all of which could influence the timing of purchase decisions."

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