2024.08 Comprehensive Housing Price Index
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The comprehensive housing transaction price index increased nationwide, in the metropolitan area, and in the provinces compared to last month, and Seoul turned from a flat trend to an increase. Compared to the previous month, the number of rising areas (97 → 109) increased, the number of flat trends (5 → 3) decreased, and the number of falling areas (76 → 66) decreased, resulting in a significant increase in the increase. In Seoul, the speed of depletion of properties for sale slowed down due to fatigue from the short-term surge and loan regulations, but the upward trend continued with solid transaction demand centered on new construction and large-scale complexes in preferred areas. Incheon and Gyeonggi-do also continued to rise, centered on major complexes and semi-new construction in areas with good living conditions, and the increase expanded compared to the previous month.
In Seoul (0.79%), Mapo-gu (1.05%), Yongsan-gu (0.99%), and Seongdong-gu (2%), famous for their Yongseong Fortress, led the rise north of the river, while in Gangnam-gu (1.89%), Songpa-gu (1.59%), and Gangnam-gu (1.36%) led the rise for the second month in a row, centered around Han River complexes. In Incheon (0.74%), Seo-gu (1.54%) and Bupyeong-gu (1.1%) saw a large rise due to a shortage of supply, while in the Gyeonggi area, Hwaseong-si (0.56%) and Suwon-si (0.53%) led the rise, centered around major complexes with good living conditions, leading the nationwide rise. On the other hand, in the case of the five metropolitan cities (-0.12%), the downward trend continued as the decline in Daegu Metropolitan City (-0.33%) widened due to the influence of the amount of new occupancy and excessive supply.
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The jeonse price index also continued to rise. It has been rising continuously since June of last year, and in the case of Seoul and the metropolitan area, it has risen for 14 consecutive months. Nationwide, it rose by 0.27%, slightly up from the previous month (0.16%). The metropolitan area (0.40% → 0.46%) also saw an increase. The number of rising areas (109 → 122) increased compared to last month, the number of flat areas (1 → 2) also increased slightly, and the number of falling areas (68 → 54) decreased. While jeonse demand is steadily maintained, the number of preferred complexes with good living conditions and school districts continues to increase due to the continued shortage of properties due to steady demand, leading to an increase in listing prices and transaction prices, continuing the upward trend.
In Seoul (0.55%), the Gangbuk area led the increase in Seongdong-gu (0.80%) and Nowon-gu (0.65%), mainly due to large complexes. In the Gangnam area, Yeongdeungpo-gu (0.91%), Seocho-gu (0.79%), and Gangnam-gu (0.79%) showed the largest increases, mainly due to new construction. In the Gyeonggi area, Hanam-si (0.74%), Goyang-gu Deokyang-gu (0.74%), and Suwon-gu Paldal-gu (0.71%) led the increase, mainly due to major complexes with good living conditions. In the local area, Sejong Special Self-Governing City (-0.29%) and Daegu Metropolitan City (-0.27%) showed the largest decreases due to the influence of the number of occupants and the number of supplies.
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The monthly rent price index also continued its upward trend, rising 0.16% from the previous month. The increase rate increased in Seoul and the metropolitan area, where monthly rent demand is firmly supported, and the five metropolitan cities also turned upward, rising slightly compared to July (-0.02% -> 0,03%). Local areas fell mainly in Sejong Special Self-Governing City and Daegu Metropolitan City due to the influence of supply, etc., but Gangwon (0.13%) and Ulsan Metropolitan City (0.16%) stopped the downward trend by changing from decline to consolidation.
In Seoul, Gangbuk (0.26%) continued to rise mainly in preferred complexes with good school districts and living conditions (Seongdong-gu, Nowon-gu), and in Gangnam (0.22%), traditional powerhouses Seocho-gu and Gangnam-gu led the rise. In Gyeonggi (0.2%), it rose mainly in Paldal-gu and Yeongtong-gu in Suwon City, and in Incheon Metropolitan City (0.4%), it rose mainly in areas near subway stations in Seo-gu and Bupyeong-gu, which have good transportation conditions.
In summary, as the housing market transaction volume increased significantly in August, domestic sales transactions are continuing to be favorable, and the monthly rent is also steadily increasing along with the sales price. Sales transactions are continuously increasing in major complexes and preferred complexes in Seoul with good living conditions, and in the metropolitan area, the upward trend is continuing in preferred complexes with good accessibility to Seoul and excellent living conditions. However, in the local areas and the five major metropolitan cities, such as Daegu and Busan, where the supply has not yet been resolved, there is a continuous downward trend due to the influence.
2024.08 Officetel Price Index
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As officetel transaction volume increased significantly, the nationwide officetel monthly rent price index showed an upward trend for 14 consecutive months. In the officetel rental market, the preference for monthly rent over jeonse continued, and the increase was maintained. (0.10% → 0.10%) However, in the sales market, the decline slightly increased as high interest rates continued and investment demand shrank. (Sale: -0.1% → -0.12%) In the jeonse market, the decline also increased as the preference for monthly rent continued due to negative factors such as aversion to jeonse and expansion of the target for reduction in the guarantee insurance limit. (-0.06% → -0.09%)
As the officetel monthly rent index rises, the profitability is also improving. The nationwide officetel profitability is 5.38%, up 0.18% from the previous month, showing a continuous upward trend. It has maintained a profitability of 5% since last year, and in particular, Daejeon (7.73%), Sejong (6.38%), and Gwangju (6.928%) recorded high profitability in that order. Seoul (4.87%) recorded the lowest profitability, although it rose slightly from the previous month.
However, considering that the highest interest rate for a one-year term deposit is 3.5% per annum, it seems like a fairly high rate of return. As the rate of return continues to rise, the demand for officetels from small investors is also increasing, and inquiries are being made primarily for properties with high rates of return and low vacancy rates.
Although the yield is continuously rising and the outlook for officetel sales is positive, it can be seen as a stage that still needs to be carefully reviewed. The regional officetel sales price index recorded -0.08% in the metropolitan area and -0.28% in the provincial area compared to the previous month, with the metropolitan area continuing to decline for 10 consecutive months and the provincial area continuing to decline for 25 consecutive months. Although the US base rate was slightly lowered (0.5%), it is suggested that we should wait and see the market for a while as the domestic base rate cut is unlikely for the time being.
