Lee Kwang-soo said, "Banpo and Yeouido reconstruction Gangnam apartments will rise? If you look inside..."

- Trump 2.0 real estate outlook, soaring Seoul apartment prices are variables

[News FM Lee Ik-seon Choi Soo-young Issue & People]

□ Broadcast date and time: November 13, 2024 (Wednesday)
□ Host: Lee Ik-seon, Choi Soo-young
□ Cast: Lee Kwang-soo, CEO of Kwang-soo's Bokdeokbang,

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.
◆ Profit Line: Issue is lost. I give you valuable information that makes money just by listening to this time well. Hit instructors in each field will tell you how to reduce taxes, how to reduce real estate stocks, and how to do so. Today, we invited CEO Lee Kwang-soo to Gwang-su's Bokdeokbang, which will deliver information as old as his name. Please come in.

◈Lee Kwang-soo: Hello. It's been a long time since I saw you.

◇Choi Soo-young: First of all, we can't help but talk about the U.S., but the word "Trump Rally" is almost a famous headline in various newspapers these days. First of all, Bitcoin and then the New York stock market hit a new high every day, but our stock market is very cold. As a result, when the 2nd Trump arrives, the stock market and bitcoin market are also curious, but I think many people will be curious about how it will affect our real estate market.

◈ Lee Kwang-soo: As you said, the stock market has been shaking a lot, especially since Trump was elected recently. If you look at it today, Samsung Electronics is showing a momentum that has surpassed nearly 50,000 won. It was only a few days ago when 100,000 people shouted, so in fact, the current asset market is in an unstable situation. But the reason why it has no choice but to affect the real estate market is that real estate basically needs a lot of assets, right? That's why the uncertainty is much greater. For example, there are investors in the real estate market as well. But if there's this much uncertainty, investors won't be able to buy real estate easily. So, of course, I think it will have a big impact on the real estate market.

◆Lee Ik-seon: What was it like during Trump's first term? Our real estate market?

◈ Lee Kwang-soo: The real estate market in Korea was not that high back then. That's why I'm always nervous when the asset price rises significantly. So, there was no significant impact because such volatility was given in the absence of a significant increase in prices.

◇Choi Soo-young: But the real estate market has almost an inseparable correlation with interest rates. But now, Trump's interest rate in the U.S. is important, but what if you make a forecast including the U.S. interest rate and the interest rate in our market?

◈ Lee Kwang-soo: So it's actually hard for us to forecast interest rates. In this case, interest rates on U.S. bond bonds have been rising recently. What that means is that the U.S. is not easily able to lower interest rates in the market. It's not a good prediction that interest rates will be cut or raised now. As a result, many people have been thinking about the impact of interest rate cuts, especially in the real estate market, but the premise is changing. Interest rate cuts may or may not be possible. So, much more... How should I say this? Your anxiety is growing. What investors fear the most is uncertainty.

◆ Profit line: That's right. Trump himself is a character who can't predict well. But since autumn is in full swing, the real estate market can't see this and think that early winter has come.

◈ Lee Kwang-soo: But what happens from the mid-to-late 2000s is that the moving season is gone. So let's move. But it doesn't affect the sale. In the past, trading volume increases in autumn or spring. But there's no such phenomenon right now. That's why I don't really use the term "movement season" a lot. Let's take a look at the transaction volume. If you look at the transaction volume of apartments in Seoul, housing prices rise when it's just hot. The transaction volume increases. Didn't we talk about this? At that time, the transaction volume of apartments in Seoul was 9,000 in July. Then in August, the number of cases decreased to 6,000 cases. But in September. It's going down to 3,000 cases. Just before, it was almost halved compared to August. It's going past November 12th now, and there have been 293 transactions. You can think of it as the apartment transaction volume in Seoul is decreasing very rapidly. The fact that the transaction volume is decreasing means that demand is decreasing. So, the number of people who want to buy a house is rapidly decreasing. You can interpret it like this.

◇Choi Soo-young: So why did this happen? ◆ Profit line: Is it because of the loan?

◈ Lee Kwang-soo: There are a lot of factors, but I think the biggest reason is that there's not a lot of demand to cover the price because it's gone up so fast. In addition, loan regulations have been introduced for banks, and as this uncertainty has increased, demand is falling faster.

◆ Profit line: Then will the price drop so if I think it'll be okay, will it be crowded again?

◈Lee Kwang-soo: But to be exact, the price has recently fallen in 2022. That's what happened when I fell in love with him. But this time, when I'm out. Yes, I don't think there will be such a phenomenon. It's because you fall out then, but you go up and fall out again. Because of the learning effect, there is a phenomenon that you don't buy it even if you fall for it. I'm going to lose it again if I buy it now, but then I don't need to buy it. These changes can happen, so a slightly different aspect may unfold.

◇Choi Soo-young: It's a little different even under the same sky in Seoul. In so-called Gangnam Yongsan and Yeouido, new highs are still being made, and in other places, it is said that the adjustment period has been started, and will the polarization continue like this in the future?

◈ Lee Kwang-soo: It seems very unlikely to me. For example, there is a reason why the housing prices of apartments in Yeouido or Gangnam in reconstruction areas are rising now. It's not because there's a lot of demand. It's because they don't sell the house. For example, housing prices are not rising because there are many people who want to buy a new apartment in line because they just came to Banpo, Gangnam. It goes up because they don't sell it. That's why one was traded and one was traded. That's why I can't keep selling it because it doesn't last long. That's why the amount of sales is important, but the amount of sales has been increasing again recently. What that means is that it doesn't last long.

◇Choi Soo-young: So you're saying that other areas that are falling off have a lot of sales right now, right?

◈Lee Kwang-soo: In other regions, the number of people selling first is increasing, but they don't sell it, saying, "Is this going to fall out, too?" Even if there is no demand, it doesn't last long.

◆Lee Ik-seon: I see. The Seoul sales price forecast index announced by KB Real Estate in October fell 9 percentage points from the previous month, approaching the baseline of 100. The Bank of Korea's previously announced housing price outlook has also shifted downward for the first time in nine months, so can I consider it as a full-fledged adjustment period?

◈ Kwang-soo Lee: The interesting thing about this forecast index is that it doesn't represent the outlook. Because how you look at the present is how you look at the outlook. That's why when the price goes up, the outlook improves. And the price will not be traded like this and the market will be bad, as you can see. So this is a companion indicator. So it's a problem in Korea. That's why many people shouldn't think that the forecast index will rise and house prices will rise in the future. So this is a natural phenomenon. I'm talking about now.

◇Choi Soo-young: But what if the Bank of Korea lowers interest rates again anyway? Then will the real estate market also swell?

◈Lee Kwang-soo: We've already lowered it once, but the market is in a bad situation. That's why we need two conditions. In order for a rate cut to affect the real estate market, the first drop must be large. But it's hard to do that. In that sense, the second thing is because of the difference in interest rates with the United States.

◆ Lee Ik-seon: They're all right. You expected everything last time.

◈Lee Kwang-soo: That's right. Then it doesn't react. So everyone is talking like this right now. If interest rates are cut, housing prices will rise. If everyone thinks so, that's not how it works. Then we all make money. That's why I'm telling you. You have to move differently to behave differently and think differently.

◆Lee Ik-seon: The story has arrived, so let's read the story. Hello, I'm inquiring about so-called accommodation facilities for raw accommodation among real estate. My parents signed two contracts in 2022. Currently, only the down payment has been deposited. The completion date is scheduled for 25, and the intermediate payment is scheduled to be paid next month. However, I think I may have to cancel the contract because I am not able to pay the intermediate payment. That's why I have various concerns. I summarized about five things. First, is it impossible to resell if the contract is canceled? Second, I wonder how resale is done if resale is possible. Third, I wonder if I should spit out the amount I received back the VAT refund when I signed the raw accommodation contract. Fourth, I know that the real estate market is currently bad, and I wonder how much of the resale transaction is. Lastly, fifth, it turned out that my parents did not understand it properly at the time of the contract. Can I ask for the cancellation of the contract in this regard? There is a transcript of the phone call with an employee that my parents did not understand well. What kind of decision should I make? What are the living accommodations?

◈Lee Kwang-soo: This is a lodging facility where you can cook. To put it simply, for example, in the past, you can stay at an inn. So, for example, officetels have regulations such as parking lots or corridors. But the accommodation doesn't have that. Because you just went and slept. But as they increased their cooking facilities, they temporarily released it. A lot of foreigners come, so you can think of it as a kind of residence. But I really like this person's question. If you ask these five questions, it's very good to answer them. Number one. If the contract is canceled, is it impossible to resell it? Of course, this is impossible. If the contract is canceled, he doesn't have the right. That's why there's nothing to resell, right?
So, of course, you can resell it before canceling the contract. So it's possible to resell the sale right. There is no limit to the number of resale rights. I can go on. So the person who bought this can sell it again and again, so of course, this can be sold. But I got a VAT refund when I signed the 3rd raw accommodation contract. Because I would have gotten a refund on the purchase tax. Then, if it cancels the contract or sells it, of course, you have to pay sales tax. So you have to spit it out again. You used this term, but you have to spit it out.

◆ Profit line: Sales tax under another name

◈ Lee Kwang-soo: Yes, that's right. The fourth one is... I know that the real estate market is not good right now, but the resale transaction is not very good right now. Sure.

◆Lee Ik-seon: This is bad, too.

◈ Lee Kwang-soo: It's a very bad situation. In particular, local living accommodation facilities are rarely traded. The Seoul metropolitan area is getting a little better, but it's a very difficult situation. So even if the transaction is now, the amount is very low, so the transaction was made to the extent that the down payment was almost lost. Still, the current market situation is very bad because the transaction is not going well. Lastly, it was said that it was done without parents understanding it properly at the time of the contract. In this case, if there is a serious defect, the contract can be canceled. But I don't know the degree of defects from the content. So this requires a judgment, but practically. I haven't seen many cases where it's canceled. Unfortunately, that's why it takes a little more conservative and time, so I think it would be good to think conservatively.

◆ Proficiency line: I hope it helped you.

◇Choi Soo-young: But why did people pay attention to the lodging facilities when you said they are not in good condition these days?

◈Lee Kwang-soo: For example, when real estate prices rose significantly in 2022 and 2021, a lot of these boiled potatoes were sold. There was a reason. This is because it is not included in the number of households of multi-homeowners. So, don't you think he even has two investments? So it was possible to invest. The second thing is that they gave me a lot of loans. So just pay the down payment, pay 10 million won, boss, wife, pay 5 million won. I sold it saying, "Just pay 1 million won." So what should I do later? Then, you can lend them all. Interest rates are low right now. Don't worry about it. That's how I did it. Low interest rates and look. If you do this later, you'll get 6-7% of the rent. That's what happened. But interest rates have gone up. Interest rates have already gone up. And isn't the lease contract not working well? And when I try to get a loan, it's very burdensome, so various problems arise, and now there are more people who cancel the contract or resell it, and on the contrary, there are no people living.

◇Choi Soo-young: So we have to look at it now when the bubble bursts.

◈ Lee Kwang-soo: That's right. So, typically, there's something I really want to say when I tell you about the property. When you approach, don't buy real estate that you can't use, so you can buy an apartment. If I can live there, I'll be interested in it. I'm in Seoul, but I can't buy an apartment in Jeju Island because it's cheap, or if it's not, I can't buy a living accommodation type facility like this. So when you approach real estate, you can use both of them, right? I would like you to take that into account and approach it. So there's something I want to tell this person. What am I supposed to do in the end? It's this. But rather than saying it directly, I'll tell you what I like. Expecting and preparing for the next is the clearest way to erase defeat. So if you keep holding on to defeat or failure, you can't start anything new. So the clearest way for you to get rid of defeat is to make a new plan, prepare for it, and wake up in the morning. I really want you to do that.

◇Choi Soo-young: So don't think of it as a stumbling block, think of it as a stepping stone.
◈ Lee Kwang-soo: That's right. I hope we can make better plans for the future by considering this from experience.

◆ Profit line: The rise in housing prices in Seoul is slowing down, but the enthusiasm of the subscription market seems to be a little different. More than 80,000 people flocked to the recent first-place subscription for Jamsil Remian I-Park in Songpa, recording 268 to 1. Will the enthusiasm of the Seoul subscription market be dampened?

◈ Lee Kwang-soo: This is a little different. The reason is that there is a market margin. For example, this I-Park in Jamsil made a market profit of about 800 million won. That's why the sale price was low. There is no reason not to participate because of the ceiling on the sale price. I think so. However, in areas with high pre-sale prices, the number of unsold houses is on the rise. That's why you have to understand that specificity. Just by looking at this, the subscription market is big these days. It's not like there's no new apartment, so I'm telling you that.

◇Choi Soo-young: But in the end, what CEO Lee always says is that supply is the most important thing in housing. In the end, the key is supply, so the government announced new housing sites in the Seoul metropolitan area that it would supply 50,000 households with the green belt removed from Surrey Pool, Daegok, and A.M. Wanggok, and Yonghyeon. If you look at the contents, this is a location with better geographical access and better transportation conditions than Seoul compared to the 12th and 3rd new cities. Do you think this will be enough to resolve the market's concerns about our supply shortage?

◈ Kwang-soo Lee: So the lack of supply is a bit of a long-term concern. For example, this supply will be supplied in almost 7 to 8 years. In the end, because supply does not occur immediately, I don't think that this policy will stabilize housing prices and, conversely, increase housing prices. But the important thing is that we need to distinguish between short and long term. What it means is that in the long run, for example, even if house prices can rise, they continue to fluctuate in the short term. However, in markets with high uncertainty like now, short-term fluctuations are very large. So, for example, two years ago, apartment prices in Seoul suddenly fell 30%. This possibility exists in the short term. But it's not the amount of apartments that construction companies build that make it fall. What I'm talking about is the volume of sales. Supplies sold by homeowners, but now, if I do my research today, the sales volume of apartments in Seoul is 89,000, the largest since the survey was conducted. So people who own homes. I want to sell it so badly. So in this situation, the supply is increasing now. Then there is a very high possibility that house prices will fall.

◆Lee Ik-seon: No, but there are 89,000 apartment sales in Seoul right now, and I'm shocked because you said 293 cases were sold earlier this month.

◈ Lee Kwang-soo: That's why there are a lot of people selling and fewer people trying to buy.

◆ Profit line: Then the price will continue to fall.

◈ Lee Kwang-soo: It's very likely.

◆Lee Ik-seon: This is the listener's text. I won the subscription while owning a small low-cost house. We are planning to move in in June, 27. Please let me know by when I should dispose of the existing house.

◈ Lee Kwang-soo: So the ownership is transferred, and it probably varies from region to region. As far as I know, it is sold until two years ago for two years after moving in, and I need to find out more about it, but then it will not be included in multi-homeowners. And when a house is outside of an overheated speculation zone, for example, it may not be too burdensome, so it seems necessary to look into those things.

◇Choi Soo-young: We'll also talk about reconstruction of Dunchon Jugong, which is the largest reconstruction since Dangun, and this is a very popular article in economics these days. As the government began to manage household loans, residents of Dunchon Jugong, who are about to move in, received a round of loans. There's a story about this. Please explain this.

◈ Kwang-soo Lee: So this is what you have to pay 20% of the balance. But didn't you keep paying the intermediate payment? But the middle payment is almost made up of loans. That's why it's difficult to raise funds right now if you don't lift the loan regulations because there are some regulations on household loans. There's a personal problem. The second thing is that banks basically have a one-year limit on household loans. But it's because a big apartment complex comes in. It's huge, so there's no one to lend it to. For example, banks have to pay 500 billion won this year, so there's only 100 billion left at the end of the year. But it takes 500 billion won to move into this Duncheonjugong. Then the bank can't lend it to you. Then the government should increase the limit for each bank or make some changes, but what problems arise is that loans cannot be made elsewhere. I think it's a big problem because there are a lot of such problems. We need to ask the fundamental question here. Can you really support the current house price without debt? So even apartments you move in like this cannot enter without a loan. So what I mean is whether we can continue to increase the price of apartments in Seoul without loans, so I would like you to know what limitations we have in that respect.

◇Choi Soo-young: So if you say that reversely now, it means that the loan is the key to everything.

◈ Kwang-soo Lee: The other thing is that the price of the apartment we can't afford right now. If you don't lend it to me right away, or if you don't lend it to me much more than my income, you can't survive this house price.

◆Lee Ik-seon: I see. However, if you look around, people who want to buy real-life apartments or real-life officetels are often having difficulty because they don't get loans, but is household loans tight like this?

◈ Kwang-soo Lee: That's about KRW 1,800 trillion in household loans now. If we increase this further, our economy will have problems. Now, Korea's domestic demand is growing by 1%. So, the country's economy is in jeopardy because it has spent money on paying off all debts. So, for example, if you increase loans to raise real estate prices, it could be pressed into your house and disappear. So, of course, we need these proper regulations.

◇Choi Soo-young: I think this will be the last question, but in the case of the reconstruction of Dunchon Jugong that we talked about a while ago, isn't there going to be a lease on a deposit basis as 12,000 households are expected to move in? First of all, the volume becomes 12,000 households, so can this have a little effect on stabilizing the lease on a deposit basis price in Seoul?

◈Lee Kwang-soo: Dunchon Jugong Apartment Olympic Park Foreo will begin moving in from November 27th. It's until March 31 of next year. We're moving in at this time, but we haven't started moving in yet, but some people are saying that even if we move in a large complex, the lease price won't fall out. But we can't move in. Some of those judgments are wrong now. There has been a similar situation in the past, but in November 2018, 9,500 households will move in Helio City, Songpa-gu. So, this is also the largest volume of occupancy since Dangun. But I'll take a look at it then. The lease price fell 11% after the move-in began. Then the price of the apartment fell by 13%. But when it was cheapest was two months after the start of moving in, the jeonse price was the cheapest. So if you want to get a lease, You have to enjoy that time. Then, when you look at the past in two months, and I want to tell you one more thing, I'm not saying negatively, but if the price change is like this, I'll keep emphasizing it. I want you to make a plan to buy my own house. I understand that I'm saying this for the last time.

◆ Proficiency line: I see. Thank you very much. Today, I listened to real estate information with CEO Lee Kwang-soo in the Bokdeokbang of Gwang-soo's house, where the issue is money. Thank you for saying that.