"This Year’s Leading Property Segment Will Be ‘A Relatively Less-Prime Single Home’... Demand Is Concentrating on 1–1.5 Billion Won Homes in Seoul’s Outer and Mid-Tier Areas"

[Financial News] In the aftermath of successive real-estate measures, forecasts have emerged that ‘a relatively less-prime single home,’ rather than just ‘one smart home,’ will become the leading property segment this year.

Appearing on the YouTube channel ‘Buiknam TV’ on the 11th, Yoon Ji-hae, head of the Research Lab at Budongsan114, forecast, "This year’s leading property segment will be Seoul’s outer and mid-tier areas." He added, "In terms of prices for relatively less-prime homes, that means the 1 billion to 1.5 billion won range."
Yoon explained, "From January through August this year, many outer Seoul areas, including Nowon, Dobong, and Gangbuk, as well as Geumcheon, Gwanak, and Guro, rose by more than 10%, with some gaining 12–13% over the eight-month period." He noted that these areas were rising faster than Seoul’s overall cumulative change rate of approximately 6%.
Yoon said, "If last year’s leading segments were the Han River Belt and Gangnam’s three districts (Gangnam-gu, Seocho-gu, and Songpa-gu), which rose 10–15%, this year’s leaders are Seoul’s outer areas and mid-tier neighborhoods." He added, "Because of tax burdens and other factors, some buyers are moving down from higher price brackets toward the 2 billion won level, while those who had been looking below 1 billion won are gathering more funds and concentrating on a relatively less-prime single home or a newly built large apartment complex in the 1–1.5 billion won range."
Even buyers with sufficient financial resources are turning their attention to newly built large apartment complexes in outer areas priced in the 2 billion won or 1–1.5 billion won ranges, taking tax burdens into account. Buyers who had previously targeted ultra-high-priced homes in the 3 billion won range—approximately 4.01 billion won—are also seeking a relatively less-prime single home because of holding-tax burdens.
The jeonse and monthly-rent market is also showing an increase of around 6%, up from last year, while sales and jeonse markets for villas and other non-apartment homes in Seoul are rising 10%. This has created an ongoing price-leveling market. In the Seoul metropolitan area, meanwhile, conditions vary sharply by location: Gwacheon in Gyeonggi Province has slowed, while leading areas such as Seongnam, Gwangmyeong-si, Bundang, Pangyo, Wirye New Town, and Hanam-si, along with Suwon, Yongin, and Hwaseong, have risen 10–15%.

Yoon explained, "As presale prices rise and jeonse and monthly rents push upward from below, people without homes become increasingly anxious." He continued, "They have to make a choice, and the trend has shifted toward ‘a relatively less-prime newly built apartment for residence,’ the most rational option within their available resources." With the easing of first-time homebuyer loan regulations added to this, a pot-shaped concentration pattern is emerging as cash-strapped end users flock to newly built apartments priced at 1–1.5 billion won.
In the second video uploaded on the 12th, Yoon also forecast, "With excess demand in Seoul’s market, a supply cliff is expected within one to three years." He said that demand from people seeking homes in Seoul and newly built properties was spreading to areas adjacent to Gyeonggi Province, sustaining a market of catch-up buying and price leveling. In particular, he suggested that after the outer areas of Seoul—Nowon, Dobong, Gangbuk, Geumcheon, Gwanak, and Guro—the market’s momentum could move to relatively less-appreciated outer areas of the Seoul metropolitan region, including Goyang City, Uijeongbu, Namyangju, and Incheon Metropolitan City.
Regarding the government’s tax reforms, he forecast that their effect in bringing actual properties onto the market would be limited. Yoon said, "For them to have an effect, a nonresident single-home owner would have to sell and remain without a home, but after 20 years of practical experience, I have found that such cases are extremely rare." He explained that even when properties come onto the market in ultra-high-priced areas such as Gangnam, many sellers use the proceeds to move into homes in other areas, such as Uijeongbu or Goyang City, or into other assets such as stocks and bonds.
[email protected] Kim Hee-sun Reporter