"How Will Home Prices Change?" Experts Say They Will Rise, but Brokers Forecast a Decline

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[Financial News] Opinions are diverging between real estate experts and licensed brokers over this year's nationwide home sales price outlook. Unlike the early-year mood that pointed to price gains, more than half of brokers have shifted to a bearish view, underscoring growing uncertainty in the property market.
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On the 5th, KB Financial Group Management Research Institute released the 'KB Real Estate Report' and also disclosed the results of two surveys conducted this year among real estate market experts and licensed brokers, from Jan. 14 to Feb. 6 and from March 31 to April 3.
One notable point concerns the outlook for nationwide home sales prices this year. In the January survey, 81% of market experts (142 people) and 76% of licensed brokers (512 people) expected prices to rise. In the April survey, however, 56% of market experts (130 people) still forecast gains, while 54% of licensed brokers (506 people) predicted declines.
By region, the share of respondents expecting home prices to rise in the Seoul metropolitan area fell from 93% to 72% among market experts and from 84% to 66% among licensed brokers. As for the size of the increase, many market experts expected a rise of 1% to 3%, while many brokers projected 0% to 1%.
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Both market experts and licensed brokers cited a shortage of housing supply and higher presale prices driven by rising construction costs as the main factors pushing home sales prices higher. On the downside, tighter lending rules and the resulting difficulty in securing financing were identified as the biggest drag.
In particular, when asked which policy would have the biggest impact on the housing market in the second half of this year, 27% of market experts and 33% of licensed brokers pointed to heavier capital gains taxes on multiple-home owners. The institute explained, "After the government announced in February that the temporary suspension of the heavier tax would end, and as the possibility of higher taxes in the second half of the year came into focus, market sentiment reversed."
Meanwhile, according to the report, nationwide home sales prices rose 1.0% last year, marking a return to growth for the first time in three years. Prices in the Seoul metropolitan area climbed 7.4%, or 3.7 times the previous year's 2.0% increase, while the Five major metropolitan cities (-1.4%) and other regions (-0.6%) saw declines. Regional polarization also widened within the Seoul metropolitan area.
The institute said that "an 'extreme polarization' market has formed" and noted that "regional gaps existed even during past housing price upswings, but there has never been a case like last year, when only certain areas surged so sharply." It also said that "the share of households paying monthly rent has increased significantly," adding that "as tenants' housing spending patterns shift toward paying rent every month, demand for related financial products is expected to rise."
bng@fnnews.com Kim Hee-sun Reporter