A stronger loan rate than the base rate? "HAN FROZEN RATE FROZEN Real Estate Market Impact"

- Real Estate Market Needs to Monitor Purpose and Operation Method
- Freeze Realization Rate of Real Estate Price Next Year, Housing Holding Tax in Seoul Could Rise 20%
- Loan Regulations? Apartment prices nationwide fall for the first time in half a year "Seoul also declines."
- Base Rate Freezes, Won't Affect Real Estate Market "Government Is Loan Rate After Freezing"

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: November 25, 2024 (Monday)
■ Talk: Kim Hyo-sun, Senior Member of NH Nonghyup Real Estate

- Top 10%-Bottom 10% House Price Difference More Than 40 Times, Real Estate Polarization Continues
- First New Town Leading District Announced This Week, Selling Temperament Spreads Due to Commercial Concerns
- "Real Estate, When You Need to Look Closely" should be analyzed closely depending on demand area and situation

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.
◆ Reporter Cho Tae-hyun (hereinafter referred to as Cho Tae-hyun): On a weekly basis, apartment prices across the country have turned downward for the first time in half a year. The loan regulation seems to have affected it. Among them, polarization is getting worse. Can this trend continue? Related to various real estate issues, <Hotple! How do you like it there? > I'll point it out in time. Today, we will be joined by Kim Hyo-sun, a senior member of NH Nonghyup Real Estate. Is the commissioner out?

◇ Kim Hyo-sun, Senior Member of NH Nonghyup Real Estate (hereinafter referred to as Kim Hyo-sun): Yes, hello.

◆ Cho Tae-hyun: Yes, how are you? Commissioner, before we start talking about it in earnest. The real estate market is now troubled by Imjang Crew. I heard this kind of sound. What is Imjang Crew?

◇Kim Hyo-sun: Imjang means that when trading real estate, you go to the site and check it yourself. In recent years, a crew of people with a common purpose of forestry is visiting to check the surrounding information, even though they do not intend to buy real estate right away. But the reason why this part is a little problematic is to pretend that you're trying to buy a real sale without revealing the purpose of a confidently simple visit, trick the broker and even pretend to be issued to the neighborhood, make a story about the actual budget or the timing of the move and talk on the phone. It is said that brokers are confused by sharing these manuals.

◆ Cho Tae-hyun: It's like obstructing work. There seems to be a problem with this, is there any way to do it?

◇ Kim Hyo-sun: In fact, these commercial parts can be problematic, so it seems necessary to monitor how clear and transparent the crew's purpose and operation are. In fact, housing has a significant impact on the national economy and emotions, so if real estate touches an upward phase, it may lead to crowd behavior, which may turn into a crew that moves prices of certain apartments. So it seems that this institutional support is necessary.

◆ Cho Tae-hyun: Actually, when real estate prices move and show a little strange signs, there are quite a few cases where these people move behind the scenes. It seems necessary to take some action on these things. Let's get into the real story. The government decided to maintain the realization rate of real estate prices next year at the same level as this year. Then, how much higher is the holding tax of the owner of the apartment in Seoul than this year?

◇ Kim Hyo-sun: When calculating property tax or comprehensive real estate tax, which refers to holding tax or holding tax, this official price is multiplied by the fair market price ratio and calculated by applying a tax rate to it. During the real estate surge, a plan for the declared value realization rate was established to make the declared value similar to the market price. However, it means that it will freeze this and reflect only the declared price and market price, but in the case of Seoul, based on the calculation, the holding tax is expected to increase by about 20% on average. On the other hand, regions where prices continue to fall, such as provinces, are expected to have less ownership tax than the previous year.

◆ Cho Tae-hyun: It means that there will be some differences by region. Then I think we should look at the price trend. Recently, the real estate market has slowed slightly. We've told you this several times, but apartment prices nationwide have turned downward. It's been a while since I saw this. How long has it been?

◇ Kim Hyo-sun: Last May 13th, it was down minus 0.02%. Since then, it has fallen 0.01% in 22 weeks.

◆ Cho Tae-hyun: It's been on the decline for the first time in 27 weeks, so overall, can we see the market situation as the number of areas where prices are rising and the number of areas where prices are falling has increased?

◇Kim Hyo-sun: The overall reason is yes, but if you look at the details of each region, the Incheon area fell by minus 0.04% in a week in the Seoul metropolitan area. The fall was even greater in Incheon than in the nation, which was also down 0.01 percent on March 25 and the first drop in 34 weeks. So, as you said, the number of rising areas has decreased and the number of declining areas has increased, especially since it is concentrated in Incheon among the metropolitan areas that have risen a lot, it has turned to an overall decline.

◆ Cho Tae-hyun: Then, should I say that Incheon is being adjusted more because the rise so far has been steep?

◇ Kim Hyo-sun: Yes, that's right. Among the metropolitan areas, even though there was a lot of occupancy in Incheon, it rose sharply mainly in well-located areas. However, in Incheon, where the location is good, the decline is slightly expanding mainly in well-located areas.

◆ Cho Tae-hyun: Okay. In any case, Seoul is the most important market in the real estate market, but the price increase of apartments in Seoul is also decreasing. How is the situation on this side of the average monthly sale price?

◇Kim Hyo-sun: The average monthly selling price is also falling now. Even in Seoul, it was about 1.24 billion won in September, but in October, it was about 1.131 billion won, indicating that the average transaction amount decreased by about 100 million won in a month.

◆ Cho Tae-hyun: Then overall, prices are on the decline, but sales are increasing, transaction volume is decreasing, and the market situation is very bad right now. What should I look at this background?

◇ Kim Hyo-sun: Actually, the factors affecting real estate have not been good all year. In the second and third quarters, prices in Seoul rose a lot as it overheated in some regions. However, it seems that the sudden change since September has had a significant impact on financial regulation. The base rate has been cut once, but the loan rate has not moved. And as we shared last time, financial regulations were strengthened in the second stage of DSR, but due to the tight regulation of each bank, the limit on loans itself is decreasing a little and there is a risk that loans may not come out, so let's wait a little without looking at them at all.

◆ Cho Tae-hyun: The overall situation is not good. You said that financial regulations have had a lot of impact, but recently after the second Trump period was launched, market interest rates have also been rising on the U.S. side. Are these things also affecting the domestic market?

◇Kim Hyo-sun: The U.S. interest rate is affecting Korea as well, so I'm worried about a rate hike right now. However, if you think again about the Trump administration in the past, there was a greater focus on the possibility of going to a rate cut again over time. So, rather, there are also predictions that interest rates will fall again if these parts wait, so it seems that there are signs that they do not move anymore right now.

◆ Cho Tae-hyun: Okay. Then just looking at the situation in Korea. As I told you again as we opened the door, the last Monetary Policy Committee meeting of this year is scheduled on the 28th. Here, a rate freeze is highly expected, but how do you think it will affect the market?

◇ Kim Hyo-sun: Although Korea's interest rate is still different from the US, I don't think the base rate itself will have a significant impact on the market. The problem is, in fact, mortgage rates in the real estate market, but there are many parts that were preemptively reflected in the second and third quarters. Until now, the difference between the base interest rate and the loan interest rate is not actually significant. So, rather than freezing the base rate, it seems more important to look at how the loan rate will move after that.

◆ Cho Tae-hyun: Okay. Another thing to point out is that it was higher that led to the rise in real estate, and the volume of transactions in these areas. Has it decreased a lot on this side as well recently?

◇Kim Hyo-sun: The trading volume itself is down a lot right now. The so-called Gangnam 3 districts are also in a situation where transactions are decreasing by almost 30-40% compared to the last quarter. However, if you look at the part of the rise, the increase seems to have slowed down a little compared to the outer regions, so the decline in trading volume has not yet affected prices immediately. In other words, although the volume has decreased, fewer people are selling at a lower price than other regions.

◆ Cho Tae-hyun: I'm looking at the situation. Then, if there is a possibility that the current atmosphere will continue for a little longer until next year, how should we approach the market from an end user's point of view?

◇Kim Hyo-sun: Actually, it's a market that we have to look at very closely by region. This year, even though various indicators related to housing were not good, the reason why prices rose was that the supply decline almost panicked, leading to a transaction. However, the fact is that the supply shortage will begin in earnest from 2026. But now that the public is more aware of those parts, it is highly likely to be next year, so how reliable and predictable interest rates and finance regulations can be the key. If the supply shortage becomes very controversial again in an unstable situation, there is no guarantee that the same situation will not be repeated again. So for now, we will go with this atmosphere within this year, but next year, it seems a little volatile depending on the factors we are talking about.

◆ Cho Tae-hyun: Okay. We should also look at it locally. First of all, the government needs to push ahead with policy announcements at a faster pace. Even in this situation, the polarization can also be cited as a topic that has been discussed in the housing market throughout this year. It's an atmosphere where polarization is more prominent?

◇Kim Hyo-sun: The recent data on polarization show that the price difference between the top 10% and the bottom 10% of real estate ownership is more than 40 times. It is said to be more than 40 times. So, when I looked into it, it was about 40 pyeong, but some apartments in Gangnam are traded for 8 billion units, and one apartment in the province is traded for less than 300 million won, so the polarization is intensifying by region. Recently, the gap in income and assets has been severe, so even the newly rich people who suddenly made a lot of money give themselves prizes as trophy houses, and to show them to others, these so-called very rare items are paid regardless of the amount. So, there are many factors, but whether it is social or real estate market itself, polarization seems to be gradually increasing.

◆ Cho Tae-hyun: Without face and other things, Korea's economic growth rate will rise further. There were also these analysis results. Anyway, in this situation, loan tightening and interest rate cuts are being delayed a little slower than expected, so the demand for buying apartments seems to be shifting a lot to the rental market for jeonse or monthly rent. What do you think?

◇ Kim Hyo-sun: That's right. I was going to buy and sell.I should wait more than a year even if I go. These people are moving on to rental demand. There are sales and lease markets in the rental market, and when comparing the two, there are many areas where lease prices have risen. As a result, demand is moving from jeonse to half-jeonse or monthly rent, and the monthly rent price is also rising.

◆ Cho Tae-hyun: I've even heard that the monthly rent price is rising. This week, the leading district of the first new city will be announced. Competition was very fierce right after applying for the leading district, but how is the situation now?

◇Kim Hyo-sun: In fact, it would be good if the leading district was selected, but otherwise, there was a relatively high risk. However, as we prepared, concerns about commerciality seem to be playing a greater role than expectations for reconstruction. It will be announced soon, but if it is not included, housing prices can fall significantly again. In addition, there are concerns that the burden of high donation and moving in may occur at any time, so usually people living in the first new city are older.

◆ Cho Tae-hyun: That's right.

◇ Kim Hyo-sun: So the atmosphere of just selling before it's announced is spreading, so there are areas where prices are falling.

◆ Cho Tae-hyun: Has it been more than 30 years since the first new city moved in? As a result, I think the age group will inevitably be high, but you just told me that you are concerned about business feasibility. Concerns about business feasibility, how is the market evaluating it now?

◇ Kim Hyo-sun: It is still a situation where commerciality continues to be a bit of a concern. The reason for the lack of commerciality is that there is some demand, but the cost is nearly three times higher than a few years ago.

◆ Cho Tae-hyun: Construction costs have gone up a lot.

◇ Kim Hyo-sun: Yes, that's right. In order to cover it, the sale price has to rise that much, but it's not easy to do that right now. Then, we have no choice but to lean on it, and it is a structure in which business feasibility can be achieved only when the donation is reduced or the floor area ratio is increased dramatically. However, as the population continues to decline, it is not possible to increase the floor area ratio of all apartment complexes, and members do not have to pay for donations, so it seems that the progress is getting worse because of this low business feasibility.

◆ Cho Tae-hyun: In any case, there are many places where there is no other way than reconstruction to rush supply like this. So, the National Assembly passed the reconstruction fast-track law, and the calculation method of the complexes became a little complicated because there was a similar content to the first new city special law. Things like this came out, too. What does this mean?

◇Kim Hyo-sun: The leading district of the first new city actually doesn't have that much. Bundang is the largest with 8,000 households, Ilsan is 6,000 households, and the rest are about 4,000 households. Now, there are concerns about the business feasibility of this, and I think that the project could continue to be delayed a lot, and some leading complexes have even promised additional public companies to increase the possibility of selection. As a result, from the perspective of the union members, the fast track passed means that reconstruction can be started without a safety diagnosis. However, there are many other reconstruction-related systems that have these advantages, and since there is no unified policy, it is a little confusing.

◆ Cho Tae-hyun: Okay. It seems that the market continues to enter a certain stage of dark hair, so if you could evaluate it with one line of the real estate market this week, how would you evaluate it?

◇Kim Hyo-sun: I think the people who listen to it will actually be very complicated. It's different by region, and we have to look at the situation of everything related to new construction and reconstruction by complex, so I think I should tell you that this week's one-line review is the real estate market that each person is doing. Since it varies greatly from situation to region, it seems that the market should analyze your situation more closely and move slowly rather than just listening to one thing and making a decision.

◆ Cho Tae-hyun: The real estate market where each of us is cut off. I think it would be better to take a closer look at the issues of each region of interest rather than the overall market flow. So far, I have dealt with various issues in the real estate market with Kim Hyo-sun, a senior member of NH Nonghyup Real Estate. Thank you for talking today.

◇Kim Hyo-sun: Yes, thank you.