"Housing end-users, wait for a month for loans." Lower interest rates, reset total loans, and lower market interest rates

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: December 2, 2024 (Monday)
■ Talk: Yoon Ji-hae, Senior Researcher at Real Estate R114

* 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): Let's get to the real estate news. a hot issue in a hot area Hot place! How about there? It's time. Today, we will be joined by Yoon Ji-hae, senior researcher of Real Estate R114. I connected you by phone. Is the researcher here?

◇ Yoon Ji-hae, Senior Researcher at Real Estate R114 (hereinafter Yoon Ji-hae): Yes, hello.

◆ Cho Tae-hyun: Yes, hello. First of all, I think the most noticeable real estate news this week is the reconstruction of the first new city. The leading reconstruction district was announced. What areas have been announced?

◇ Yoon Ji-hae: There are a total of 13 leading districts announced this time. It can be seen as a total of 36,000 units. Usually, one area contains two to three or more complexes, so considering these parts, if you look at each of my zones, Bundang now has 19,448 units in three zones, Ilsan has 8,912 units in three zones, Pyeongchon has 5,460 units in three zones, Jungdong has 5,957 units in two zones, 4620 units in two zones, and 36,000 units in total.

◆ Cho Tae-hyun: It can be seen as a pretty large scale, but let's go more in principle and what is the leading reconstruction district?

◇ Yoon Ji-hae: The very meaning of leading means that it is dragged from the front.

◆ Cho Tae-hyun: Is it like a leadership department?

◇ [Yoon Jihae] Yes, that's right. But now, for example, the total amount of the first new city is about 300,000 units. Among them, about 36,000 units have been designated, so it would be good to understand that it means that we will lead and develop these places first at about 10% or more.

◆ Cho Tae-hyun: Okay. I'll start a full-scale reconstruction with this signal. If so, I think we should also look at the price trends around us. How did the price flow of the areas designated as leading districts come out?

◇ Yoon Ji-hae: The overall price flow was relatively close to the Gangnam area, so there was some movement in new cities favored by the demand class. Among them, Bundang has the highest preference, so some complexes in Bundang have seen an increase of about 200 million won to 300 million won in the past year. On the other hand, in other new cities, the rise was insignificant even before the designation of the leading district, but because of this, among the complexes whose prices have risen due to expectations for the designation of the leading district in Bundang, disappointing sales may come out mainly in those that were not selected this time.

◆ Cho Tae-hyun: Okay. Prices seem to respond to some extent, but the government's goal is to start construction in 2027 and complete and move in in 2030. However, I think there are a lot of doubts about this because the market response is also lukewarm. What do you think, researcher?

◇ Yoon Ji-hae: It doesn't seem difficult to designate a special maintenance area in 2025. In 2026, we will establish a management disposal plan, and in a way, we will go to the management disposal plan within two years from now. And the current government aimed to start construction within the term of office in 2027. From here, there are controversies over whether it is realistic. However, if the construction begins normally, it will be moved in 2030, but as I explained earlier, there are some areas where I wonder if the construction will be possible or not at that time, so I wonder if moving in in 2030 is too much of a blueprint.

◆ Cho Tae-hyun: You asked if the construction of 2027 itself is realistic, but what is the background for expressing the question of reality?

◇ Yoon Ji-hae: First of all, establishing a management and disposal plan within two years is very fast.

◆ Cho Tae-hyun: We have to hurry up.

◇ Yoon Ji-hae: And even if we establish a management and disposal plan in 2026, shouldn't these 36,000 households eventually migrate? But the migration period will probably be very short. To start construction. However, there are issues that clearly stimulate the prices of monthly rent around me during this migration process, so it is said that migrant houses are also prepared, but that's why it doesn't seem easy to actually start construction.

◆ Cho Tae-hyun: In the authoritarian era, it's not an era of advanced development, so there must be a lot of difficulties, but if I see it as another problem, I think it's also a contribution. What do you think about this part?

◇ Yoon Ji-hae: The contribution is the most worrisome part because it is the direct funding of the members. However, so far, the Ministry of Land, Infrastructure and Transport has not guided how much will be charged, but the part to consider here is the contribution, so the level of contribution varies depending on the area you choose compared to the previous asset.

◆ Cho Tae-hyun: That's right.

◇ Yoon Ji-hae: So if you live in a small area and choose a medium or large size, of course, my contribution will increase. There's a tendency to look at the part of contributions as a kind of cost, but it's actually more of a kind of cost concept. So when this cost is put in, the sale price eventually converges to that level. Therefore, if a certain premium is expected to be reflected in the sale price including the cost after moving in, there is no need to worry too much about the contribution and prepare in advance.

◆ Cho Tae-hyun: So it means that you have to go up above this later.

◇ Yoon Ji-hae: It's kind of like this. So the concept of rising is premium. Since the contribution is a cost concept, the price is the right expression.

◆ Cho Tae-hyun: Oh, that's what happens. I see. I got it. But another thing to point out is that I think we need to look at this part of the migration measures you mentioned a while ago. If the migration measures are not taken, there will be a possibility that the monthly rent and other things will skyrocket. Do you have any migration measures now?

◇ Yoon Ji-hae: Specifically, the migration measures are dealt with in about three categories. First of all, there is one thing that we should use some public housing, such as the 3rd new city. And secondly, let's speed up the projects of urban development projects and housing site development projects located nearby and prepare houses for migrants. And now, the third is the first and second, but if it doesn't go well, the prices of jeonse and monthly rent around it will skyrocket. In that case, let's develop sequentially, but in that case, the time difference between the leading district and the Earth that is now ending can be seen as an issue that can widen for more than 10 years.

◆ Cho Tae-hyun: So are you saying that the supply could be delayed further?

◇ Yoon Ji-hae: That's right. If a large new city of 300,000 households moves, the ripple effect of the jeonse market rental market is huge, so in the past, the Seoul Metropolitan Government has had such effects, so there have been cases where the Gaepo district has adjusted the migration period for several months. Likewise, in this case, it is more effective, so adjustment of the migration period is a reasonable alternative.

◆ Cho Tae-hyun: Adjusting the timing of migration would be a reasonable alternative. I see. We were talking about the Seondo district. There is also a news of development in Seoul. It's quite big, but the Seoul Metropolitan Government said it would develop the Yongsan maintenance window again. This is the area where you've been asleep for 11 years, so how specifically are you going to develop it?

◇ Yoon Ji-hae: This part has actually been re-promoted in earnest since 2022 when Seoul Mayor Oh Se-hoon took office. How will you carry out your business last year? There was an announcement and another announcement in February this year. And recently, I'll do my best. There was an announcement.

◆ Cho Tae-hyun: He certainly has a will.

◇ [Yoon Jihae] Yes, that's right. So, unlike in the past, there is a high possibility of success. For example, if you look at the total area now, it is 500,000 square meters. In the past, general construction companies were the project implementers, but this time, KORAIL and SH Corporation will be the project implementers. The construction of infrastructure is set to begin in 2025 and move in in 2030, and the total project cost is about 51 trillion won, so it is always possible for us to evaluate it as the largest development project since Dangun in the market. Here, the project implementer, Korail and SH Corporation's project cost is about 15 trillion won, so it can be seen as an attempt to increase the possibility of success by putting this part first.

◆ Cho Tae-hyun: Okay. As you said, there seems to be a little possibility this time, but I think it's the biggest development project since Dangun. Let's talk about the development up to here. Let me take a look at the overall market situation. The Bank of Korea cut its benchmark interest rate last week. Researcher, did you expect this?

◇ Yoon Ji-hae: First of all, the interest rate issue in the market is actually going to be done by people like me who are looking at real estate in the market. I don't see anything that won't be the case, but overall, the flow itself was open to a cut as the Bank of Korea sees a neutral interest rate of about 2.5%. In particular, the biggest concern about the cut was the household debt issue, which was now clearly open to the government's loan regulations, which actually slowed the pace of household debt growth. However, it was difficult to predict in the market.

◆ Cho Tae-hyun: That's right. In fact, I felt like I was stabbed in the back without expecting at all, but when the interest rate cut was made, the Bank of Korea is worried a lot about which real estate market will boom again. What kind of impact do you think this rate cut will have?

◇ Yoon Ji-hae: There may be a time difference in market interest rates, but the phases that are falling little by little are now being seen in December. This part can be seen as an issue that clearly helps increase demand. However, since the government's omnidirectional loan regulation is currently underway, it is a question of who is stronger because the two sides conflict. At this point, the government's loan regulation is progressing more strongly, so it seems difficult to see it as an issue that revitalizes the real estate market.

◆ Cho Tae-hyun: So, the Bank of Korea lowered the base rate because the government's lending regulations are so strong, but the effect is inevitably insignificant. Can we understand this?

◇ Yoon Ji-hae: Yes, that's right. But what you need to think about is that we were now managing the total amount of household debt. It's reset again because 2025 is about a month away. In January, the banking sector will be a little freer from managing the total amount. In addition, the reflection of the rate cut, that is, the base rate cut, reflects the base rate in the banking sector and the loan regulation is eased at the beginning of the year, so the additional interest rate is now adjusted, and the real estate market is expected to work as a positive issue at the beginning of the year.

◆ Cho Tae-hyun: If you need a loan or want to change a loan, I think you should think about it early next year. I think it is also a market where there were a lot of variables when looking at the real estate market overall this year, including the regulation of supply-expanding loans. 2024 is only a month away. It's time to turn a year older, and you're in your mid-40s, so if you could pick one issue that has had the biggest impact on the real estate market, what would it be?

◇ Yoon Ji-hae: When I was looking at the market last year, I took the inflation issue as the biggest keyword. There was certainly an issue, but looking back on the market this year, I think it would be right to catch keywords related to finance that caused both weak demand and increased demand. So, I think we can set this year's keyword as the first interest rate cut in three years or the government's full-fledged loan regulation.

◆ Cho Tae-hyun: That's how you set this year's keyword, and if you could give us a brief preview of the keyword next year, what would it be?

◇ Yoon Ji-hae: Next year's keywords have begun with the current loan regulation, so you should consider some precautions on the balloon effect in the financial sector. These balloon effects are expected to have a particular impact on the monthly rent market, so each individual may have different countermeasures.

◆ Cho Tae-hyun: That's why I don't think the end users have a clear sense of it. I heard that you conducted a survey on the housing price outlook for the first half of next year, but I don't think the response came out so clearly here. How did it turn out?

◇ Yoon Ji-hae: The outlook for the rise is about 32% and the outlook for the fall is 25%. We're conducting the first half of the year survey for the last three consecutive times. The outlook for the third consecutive rise was more dominant. Of course, the proportion of flatness is the highest, but it's important to see the composition between the rise and the fall that always appears in the neutral part. However, if you look for the evidence that the rise is slightly higher than the outlook for the decline, the outlook for the rise is overwhelmingly dominant on the front-monthly market. Even if you classify the two categories of jeonse and monthly rent separately, the prospect of an increase on the jeonse side is 2.7 times higher than the prospect of a decline. On the monthly rent side, the prospect of an increase is more than six times higher. As a result, we are evaluating that the prospects for the trading market to rise are still a little high.

◆ Cho Tae-hyun: Then are you also thinking that the house price will be at least strong in the first half of next year?

◇ Yoon Ji-hae: The forecast for the first half of next year was stamped and pressed by the parts pressed by the loan regulation in the second half of the year, but the supply needs to be supported on the bypass path in order for the effect on the stamping to be sustained. However, since those parts are not supported, we first expect that the price of jeonse will be unstable in terms of the balloon effect on the jeonse market. Jeonse prices are a leading indicator of sales prices, so in the end, the parts we seek through loan regulation speed up the inflow into the rental market. Nevertheless, those who tend to buy their own homes do not expect the current trend to turn to a downward trend as it eventually flows into the mid- to low-priced market.

◆ Cho Tae-hyun: Then I have to buy my house now. For those who are tired of the monthly rent, how should we look at the timing around the first half of next year?

◇ Yoon Ji-hae: You have to keep thinking about the timing from now on. However, the judgment will vary depending on whether you are a homeless person, a single homeowner, or a multi-homeowner, but from the perspective of a homeless person, it seems almost certain that the monthly rent market will be unstable. That's why the resources available to you, for example, the funds you have, and the maximum that you can get a plus loan, doesn't come out much within the DSR category anyway. What serves as the alternative to choose from it depends on each situation, so if you can't choose Seoul from a regional choice, you can choose to move to the outskirts and build a new one.

◆ Cho Tae-hyun: Okay. I think you need to review it in various aspects. And lastly, actually, the time is up, but I think I'll be so disappointed if I don't listen to this, so please make a line review of the real estate market this week.

◇ Yoon Ji-hae: This week can be evaluated as a week to see the impact of the first new city's leading district and interest rate cuts.

◆ Cho Tae-hyun: Okay. So far, I have reviewed various real estate market issues with Yoon Ji-hae, senior researcher at Real Estate R114. Thank you for talking today.

◇ Yoon Jihae: Yes, thank you.