2024.06 Comprehensive housing price index
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National house prices turned upward for the first time in 7 months. While Seoul and the metropolitan area are rising, the decline in regional areas is widening and remaining flat. The national sales price index fell by -0.02% last month, but rose by 0.04% this month. The increase in Seoul (0.14% → 0.38%) and the metropolitan area (0.02% → 0.19%) also increased significantly. The five major metropolitan cities (-0.14% → -0.22%) and provinces (-0.06% → -0.10%) are experiencing a widening decline and are not easily escaping from the downward trend. In Seoul, the increase seems to have expanded due to the influence of the concentration of purchase inquiries in preferred complexes and low-priced properties and the increase in the desired selling price. Among Seoul regions, Seongdong-gu (0.97%) rose mainly in large complexes near the subway station, while Yongsan-gu (0.62%) and Mapo-gu (0.54%) rose mainly in favored complexes such as the Han River. Seocho-gu (0.76%) rose mainly due to large-scale reconstruction complexes and new construction near stations, while Songpa-gu (0.67%) and Gangnam-gu (0.46%) rose mainly due to preferred complexes.
In Incheon, the rise was centered on large and major complexes in Namdong-gu (0.15%) and Yeonsu-gu (0.12%), centered on Jung-gu (0.65%) and Seo-gu (0.17%), which have good settlement conditions. The economy turned from a downturn to an upturn, with a mix of ups and downs by region and complex. There was a significant increase mainly in major complexes in Gwacheon City (1.38%) and Bundang-gu, Seongnam (1.08%), which have good settlement conditions, but the impact of the expected move-in volume in Pyeongtaek City (-0.31%) continued, and the downward trend is maintained mainly in Ilsanseo-gu, Goyang (-0.26%). .
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The comprehensive housing rental price index continues to rise, but the increase has decreased compared to last month (0.12% → 0.11%). Seoul (0.26% → 0.38%) and the metropolitan area (0.28% → 0.31%) increased compared to the previous month, but fell due to the large decline in the five major metropolitan cities (-0.03% → -0.10%) and local areas (-0.03% → -0.06%). It appears that
In Seoul, the increase has expanded as the shortage of listings continues, mainly in preferred complexes with steady demand for rentals. The rise was centered on large complexes in Seongdong-gu (0.80%) and Yongsan-gu (0.51%), school districts and preferred complexes in Nowon-gu (0.65%), and major complexes in Jung-gu (0.57%). Yeongdeungpo-gu (0.49%) and Gangnam-gu (0.39%) rose mainly in favored complexes and major complexes, while Guro-gu (0.41%) and Dongjak-gu (0.39%) rose mainly in small and medium-sized areas with favorable conditions for new construction and redevelopment near subway stations. In Incheon and Gyeonggi, the upward trend continued, mainly in preferred complexes such as those near subway stations, due to increased demand using special rental deposit loans for newborns. In Incheon, the rise was mainly due to new construction in major complexes in Jung-gu (0.541 TP3T) and Namdong-gu (0.351 TP3T) and Seo-gu (0.501 TP3T) with good settlement conditions, centered around Bupyeong-gu (0.641 TP3T), which is short on supply. In Gyeonggi-do, Gwangmyeong-si (1.02%), which has a high demand for small-scale units, Siheung-si (0.71%), mainly in the area near the station, Bucheon Sosa-gu (0.64%) showed an upward trend due to lack of supply, and Bucheon Wonmi-gu (0.59%) showed new construction. It mainly showed an upward trend.
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The comprehensive housing monthly rent price index also continues to rise. The increase increased in Seoul (0.25% → 0.30%) and Incheon (0.05% → 0.19%), and in the five major metropolitan cities (0.02% → 0.06%), Ulsan (0.14%), Busan (0.02%), and Daejeon (0.04%). It mainly rose, and the extent of the increase expanded.
In Seoul, demand for monthly rents continues to rise, mainly in areas with good transportation and residential conditions. Seongdong-gu (0.70%) and Geumcheon-gu (0.30%) rose mainly for large complexes, Yongsan-gu (0.45%) mainly for small complexes, and Nowon-gu (0.39%) mainly for construction. Mapo-gu (0.39%) and Yeongdeungpo-gu (0.33%) rose mainly in areas with good settlement conditions, and Songpa-gu (0.27%) rose mainly in favored complexes. In Incheon and Gyeonggi, rental demand continues mainly in Namdong-gu (0.39%) and Sangnok-gu (0.40%), which have good proximity to residential areas, and Bupyeong-gu (0.37%), Gimpo-si (0.42%), and Gwangmyeong-si (0.35%), which are mainly semi-new and small-to-medium-sized. And the upward trend continued.
There are signs of a rebound in the residential real estate market. Seoul and the metropolitan area are experiencing an upward cycle, and local areas are expected to recover soon. It is predicted that this phenomenon will not be a temporary fluctuation. This can largely be explained by reasons such as a lack of supply and an increase in rent prices.
Due to weakening business feasibility due to rising construction costs, permits and construction starts have decreased significantly. According to the 'Housing Supply Situation Analysis and Stable Housing Supply Strategy' published by the Korea Research Institute for Human Settlements, last year's nationwide housing supply performance recorded 74.2% in permits and permits compared to the annual average of other years, and 47.3% in construction starts, which is less than half. It is predicted that there will be a significant shortage of homes to be supplied in the next 2 to 3 years.
In this situation, the rise in rental prices is also expected to have an impact on the recovery of the real estate market. This is because jeonse prices continue to rise, making actual consumers consider selling rather than jeonse. Jeonse prices in Seoul have been rising for 60 consecutive weeks and are also showing strength in Incheon and Gyeonggi. It can be predicted that the rise in rental prices will eventually affect the rise in house prices and the residential real estate market will rebound.
2024.06 Office Price Index
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In the second quarter of 2024, offices overall showed a low vacancy rate that was largely unchanged from the first quarter. However, as regional polarization continues, the differences between the Seoul area and local areas still persist. The Seoul office market continued to maintain its natural vacancy rate due to increased demand due to the relocation of large corporate headquarters in the Yongsan Station area, waiting for reconstruction and remodeling due to rising construction costs in Gangnam and downtown areas, and new entry into industries related to the 4th industrial revolution. In the case of GBD, the vacancy rate increased slightly compared to the previous quarter due to the vacancy of large tenants. In addition, CBD and YBD showed no significant difference in vacancy rates.
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In the office space, rental demand increased due to rising construction costs and a lack of new supply, resulting in an increase in the rental price index. Office rents also showed significant regional polarization. In major areas of Seoul, rental prices were high due to solid rental demand, while in Jeonnam, Gyeongbuk, Gwangju, and other regions, the rental price index also fell significantly as the vacancy rate increased. Accordingly, it can be seen that the national rental price index increase rate is somewhat lower than the increase rate of the rental price index in the Seoul area. Accordingly, the Seoul office investment rate of return has increased, and it is interpreted that the rate of return has increased due to increased demand for office investment and increased asset values.
