"Increased Interest Rate Uncertainty After Trump's Election, Continued Real Estate Market Slump"

With the election of former President Donald Trump, the 47th President of the United States and the Republican candidate, there is an analysis that uncertainty in South Korea's construction and real estate market has increased. Experts pointed out that tariffs and other factors could lead to rising prices and potentially change the trend of interest rate cuts. They also noted that rising raw material prices could further exacerbate the difficulties faced by the real estate market, which is already struggling with increased construction costs.

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On the 7th, Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, observed, "Trump's election could spur interest rate hikes, but since inflation is stable, it is uncertain whether the Federal Reserve will raise the benchmark interest rate." He added, "The subdued atmosphere in the domestic real estate market seems likely to continue until early next year, but since the situation in the U.S. is unpredictable, this is also uncertain."

Ham Young-jin, Head of Real Estate Research Lab at Woori Bank, also said, "The U.S. interest rate cut trend may not change abruptly due to Trump's confirmed election," and predicted, "Since the central bank has independence, it is unlikely that the trend will completely change because of President-elect Trump."

However, he predicted that if the interest rate cut trend changes, the real estate market downturn will be prolonged. Kim Hyo-sun, Senior Real Estate Specialist at NH Nonghyup Bank, said, "Contrary to the anticipated low-interest era, if interest rates rise due to Trump's election, the housing market could continue to stagnate amid strict loan regulations," adding, "From the supply side, rising construction costs could also affect the market, making revitalization difficult."

Kim In-man, Director of Kim In-man Real Estate Economic Research Institute, also said, "The market dislikes uncertainty the most, and this has increased," adding, "The market has already entered an adjustment phase due to loan regulations, but the added uncertainty about how the U.S. will handle interest rate policy could prolong the downward watch trend for about six months." Lab Head Ham also said, "If Trump's 'America First' policy affects South Korea's exports, the real estate market is likely to stagnate," and predicted, "In this case, real estate purchasing power is expected to be negatively impacted."

There are also opinions that the impact of Trump's election on the market will be limited. Han Moon-do, Professor of Real Estate at Soongsil Cyber University, emphasized, "If the exchange rate rise is not controlled, interest rates will also rise, but it will not shake the government's fiscal soundness policy." He also predicted, "With continued regulations such as Debt Service Ratio (DSR) and Loan-to-Value (LTV), along with a trend of reduced consumption, downward pressure on housing prices will increase."

In the overseas construction market, both positive and negative factors are expected to coexist. Lab Head Ham said, "How the Middle East conflicts and the Russia-Ukraine war issues are handled could affect the volatility of raw material prices and the trend of rising construction costs." Samjong KPMG, in its report 'The Election of President Donald Trump and Its Impact on Domestic Industries,' stated, "Since President-elect Trump mentioned a swift end to the Russia-Ukraine war, domestic companies should seize opportunities to win reconstruction projects in Ukraine," but also advised, "However, the announced tough stance on the Middle East means that domestic construction companies highly dependent on the Middle East market need to continuously monitor project ordering situations."

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