Land transaction permit area for Jamsil, Daechi, and Yeouido will be lifted after 5 years.

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: January 20, 2025 (Monday)
■ Talk: Kim Kyu-jung, real estate expert at Korea Investment & Securities Co., Ltd.

* 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): Hot issue in hot area, how about hot place? It's time. Let's take a look at various issues surrounding the real estate market. Today, we will be joined by Kim Kyu-jung, a real estate expert at Korea Investment & Securities. Is the commissioner out?

◆Kim Kyu-jung, Real Estate Specialist at Korea Investment & Securities (hereinafter referred to as Kim Kyu-jung): Yes, hello.

◇ Cho Tae-hyun: We will continue to talk about the Monetary Policy Committee today. The Monetary Policy Board froze the key interest rate last week. How do you see the impact of this on the real estate market?

◆Kim Kyu-jung: Yes, first of all, interest rates have a significant impact on real estate market trading sentiment. Therefore, there is a possibility that the freeze will continue to affect the recent wait-and-see stance, but although it was frozen this time, it is open to cut it as early as February, and there is a possibility of a two or three cut within the year, so the direction does not seem to be very significant. In fact, there were two cuts at the end of the year, but the actual market interest rate or mortgage interest rate felt by borrowers did not fall significantly due to the effect of the additional interest rate, so I don't think this freeze will suddenly have a more psychological impact. As you know, how the loan interest rate is actually lowered, including the additional interest rate, is expected to determine the impact on the market and sentiment in the future. It's off-season. In winter in January, I think we need to judge our influence by looking at the situation from the lease on a deposit basis transaction in the spring to the point when the transaction is slightly resolved.

◇ Cho Tae-hyun: Then, basically, there is a high possibility that the wait-and-see stance will continue a little more. Are there any indicators that directly show this situation now?

◆Kim Kyu-jeong: In fact, the number of monthly reports has been around 3,000 since September. The number of transaction reports that were reported more than 9,000 in July last summer has decreased significantly, and although it is very polarized in the Seoul area, the number of transaction reports that have fallen in prices is also coming out, so it seems that people are judging whether the market is undergoing a little adjustment or weakening. From the perspective of consumers now, prices seem to be adjusting and interest rates and loan regulatory environments continue to be volatile, so let's wait and see for a while and make market decisions.

◇ Cho Tae-hyun: Okay. According to data from the Korea Real Estate Agency, apartment prices in Seoul have been flat for three weeks, but apartment prices nationwide have rather increased their decline. I think it's connected to this atmosphere, but what are the indicators?

◆Kim Kyu-jeong: In fact, the weekly apartment price fluctuation rate in Seoul has been flat for three weeks, and there are areas outside the metropolitan area and regions showing negative fluctuations, so the drop seems to be growing slightly nationwide. So, looking at these aspects, interest rates seem unstable, and there are a lot of internal and external variables, and there is a lot of uncertainty, so you're watching to see if there's an adjustment. As I have said many times, in Seoul, transaction prices are very high on one side of the same premises in the same district, and only low-priced sales are traded on the other side, so it is expected that consumers will show polarization as they make reliable transactions amid uncertainty for the time being. So, as you know in Seoul, prices continue to fall in regions or provinces where there are relatively no investment factors, and in areas where there is a demand for investment, such as the recent general sale of the ceiling on the sale price or the selection of reconstruction construction companies, you should look for measures to cope with each region.

◇ Cho Tae-hyun: Some say that the situation is divided by region and within that region, and that this is the prelude to a downward shift. What do you think about this prospect?

◆Kim Kyu-jung: Overall, the situation is not very good for real estate construction investment. Almost all permits and investment indicators deteriorated significantly in 23 years and then eased slightly in 24 years. Due to problems such as inflation, exchange rate instability, and soaring construction costs on the supply side, for example, construction companies have also reduced the supply of construction investment housing this year and are doing business only in areas with good business feasibility, which is likely to worsen the housing and real estate industry overall. As a result, there are concerns that these aspects will appear in the transaction market of real users, but overall, the possibility of such stagnation has increased considerably. However, even within that, funds are concentrated on these investment materials and safe investment assets that are guaranteed to be profitable, so it should be considered that polarization is maximized in a situation where adjustments are weakened.

◇ Cho Tae-hyun: If you say it's a safe investment or target, what can you give me as an example?

◆Kim Kyu-jeong: From the perspective of end-users, the loan conditions have continued to be unstable recently, so they are taking a reliable approach to auctions and low-priced sales with clearly adjusted prices. In the case of investors targeting new apartments in Seoul with a large scale, as you know, there are not many remaining sales targets supplied by the upper limit in January, such as Bangbae-dong, which seems to be concentrating on such workplaces. In any case, those looking for substantial new construction are approaching those places by dividing targets according to their conditions, as the 3rd new city main office drug will be introduced and these public supplies are waiting, centering on LH this year.

◇ Cho Tae-hyun: Okay. So far, I've looked at the overall market trend. As expected, if it's a barometer of the real estate market, we can't talk about it without Seoul, so let's talk about Seoul. It is said that the Seoul Metropolitan Government is moving to ease real estate regulations. Mayor Oh Se-hoon said he would try to terminate the land transaction permit zone in downtown Seoul, but how much is the land transaction permit zone in Seoul now?

◆Kim Kyu-jeong: About 10% of Seoul's area is designated as a land transaction permit area. Numerically, about 20 million pyeong is currently tied up in 65.25 square kilometers of equilibrium, and some say that this is excessive except for green belts and areas like this, and in places that have been designated as land transaction permits in Gangnam, owners who are affected by the designation refute that their property rights are violated. There have been analyses that it has been renewed every year for five years and has been less effective as it has been designated, but this time, Mayor Oh Se-hoon of Seoul seems to have expressed his intention to cancel it after considering its effectiveness at a time when the market is showing signs of adjustment and there are concerns about a downturn in the industrial market overall.

◇ Cho Tae-hyun: In fact, there were many criticisms that this was too much and not effective. There were many complaints, but some point out that if this is really terminated, the speculative trading, which had been suppressed, could be revived. What is your overall assessment, Commissioner?

◆Kim Kyu-jung: There may not be much change as interest rates on the wait-and-see stance are also showing an impact, but with interest rates falling into the second half of the year and the market and investor sentiment being created, deregulation seems likely to have an impact. In fact, high-priced apartments or reconstruction areas such as Apgujeong and Mokdong Yeouido Seongsu are designated around the international exchange complex areas such as Samseong-dong, Cheongdam, Daechi, and Jamsil. In fact, the gap investment was not possible in the early stages of speculative transactions because housing must be approved for transaction and live for two years. As a result, if interest rates fall as it unravels, there is a possibility that the market will change, so even if it is lifted, the market should be continuously monitored, and even if it is lifted, it should selectively select and manage the designation of complexes that are undergoing reconstruction. Since the situations that are usually solved at the administrative level have been predicted so far, even if they are solved, management and additional designation to prepare for future situations should be reviewed together.

◇ Cho Tae-hyun: It's a very sensitive issue, and I think you'd better look at the situation and see how to respond. Let's take a look at the presentation of the work plan of the Ministry of Land, Infrastructure and Transport. In a way, the real estate market is very influenced by the government, so things that are attracting attention are such as the presentation of business plans. The government authorities said they would supply the largest amount of public housing ever this year. How much are you going to supply?

◆Kim Kyu-jeong: Yes, according to the work plan announced this time, we will supply 252,000 public housing units this year, so the announcement of our position was made as the supply of 2.7 million units announced at the beginning of this government continues without a hitch. And among public housing, there are more plans this time than in 23 or 4 years when the target was low by raising the construction type to 74,000 households. They are clearly determined to focus on supply. To give you a little more details, LH plans to purchase new houses and supply them to the public through rental this year. We will proceed with these without a hitch and quickly put more than 30,000 units purchased last year on the market. These are the situations that are being talked about. However, in the case of last year, most of the licensing performance was postponed until the second half of the year, and it was not confirmed or processed until December, so this year's progress is going to be carried out without a hitch because there are these patterns in the progress schedule. There are concerns in the market that it would be nice to show it early, so the Ministry of Land, Infrastructure and Transport, including LH, will announce it and show about 20% of the licensing performance in the first half of the year earlier than usual. So, we are showing a position to show that there is no supply disruption and there is no problem with continuous supply to the market, so everyone needs to watch carefully to see if these things are implemented properly.

◇ Cho Tae-hyun: But I don't know because this is a time of great policy uncertainty. What will happen? It was called Lotto subscription, and there was a lot of noise in this part, too. But how does it change when the application conditions become strict?

◆Kim Kyu-jeong: The key thing is that housing owners are restricted from subscribing. In this case, which has been called "pick-up," anyone could apply for and compete for the unranked subscription, regardless of whether they have a subscription account or a house, but since some point out that it is too overheated and a little negligent in management, the government plans to restrict only homeless people to apply. Also, I think we can restrict the qualifications for the residential area. However, the detailed provisions have not yet been announced on how to restrict this, and the government will announce how to manage qualifications for unranked subscriptions in addition to what it is reviewing this month, so those interested should take a look at this and see what conditions I can be eligible for or what areas I need to check. In addition to picking up, there have been a lot of false registration and fraudulent subscriptions in general subscriptions, and among them, there have been a lot of complaints about checking on dependents. In the future, it has been announced that they will check whether they are actually living in the process of checking whether they are actually living or not, and whether they are actually using hospitals or pharmacies in the area with the details of health insurance care benefits. So, there have also been many complaints that they are discriminated against in fraudulent subscriptions, so I think it can be seen as a situation in which it is well adjusted to be more difficult to manage.

◇ Cho Tae-hyun: First of all, what is certain is that only homeless people can do it, I think this part is almost certain. However, some say that regulations should be strengthened and that it is a good direction, but only in overheated areas should be differentiated. Member, what do you think of this opinion?

◆Kim Kyu-jung: I agree with you a little. First of all, unranked subscriptions have been strengthened and then eased, and the most representative things in this process are that there is no need for such regulations in areas where there are unsold houses. And as it gets serious, there have been areas in history that have been eased so that anyone can apply unranked subscriptions, so even if regulations are tightened this time, it should be applied differently to supply areas, complexes, and regions where unsold housing is a problem.

◇ Cho Tae-hyun: I hope the policy authorities take a close look at these areas and prepare them so that there are no side effects on the overall real estate market. Lastly, please make a comment on the real estate market this week.

◆Kim Kyu-jung: Yes, this month, there are continuous projects that can maximize the polarization situation or general sales cap on the sale price. Overall, housing transactions are very sluggish, so end-users will have to come up with a practical approach strategy such as low-cost housing or auctions, and these changes should be noted because loan interest rates and loan regulations are having the biggest impact.

◇ Cho Tae-hyun: The market is constantly changing. You continued to talk about the practical strategy, but I think it would be better to focus on this and respond. So far, I have pointed out various issues in the real estate market with Kim Kyu-jung, a real estate expert at Korea Investment & Securities. Thank you for talking today.

◆Kim Kyu-jung: Thank you.

#Seoul City #Deregulation #LandTransactionPermitZone #Gangnam #SuccessiveDistrict #GapInvestment #Samsil #Mokdong #Apgujeong #Yeouido #RateFrozen #Real Estate #GwanmangTax #UnrankedSubscription #Pickup #LottoSubscription