2024.07 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 last month, the number of rising areas (90 → 97) increased, the number of flat areas (1 → 5) also increased, and the number of falling areas (87 → 76) decreased, so the increase increased. In Seoul, many complexes have renewed their registrations due to increased demand for moving to higher-end areas within and between regions, and large-scale reconstruction recommended complexes are seeing an all-round increase in transaction prices, with out-of-town investment demand concentrated. In Incheon, the increase was centered on preferred complexes with good residential prospects in Seo-gu, Jung-gu, and Namdong-gu, and in Gyeonggi, it was centered on Gwacheon-si and Bundang-gu, Seongnam-si.
In Seoul (0.76%), the increase was centered on the Han River complexes of Seongdong-gu (1.94%) north of the river, Seocho-gu (1.56%), Songpa-gu (1.54%), and Gangnam-gu (1.11%) south of the river. In the metropolitan area (0.40%), the increase was centered on areas with good living conditions, such as Gwacheon-si, Gyeonggi-do (1.61%), Bundang-gu, Seongnam (1.27%), and Seo-gu, Incheon Metropolitan City (0.49%), and both Incheon and Gyeonggi showed an expansion in the increase compared to the previous month. On the other hand, the downward trend was noticeable in Daegu Dalseo-gu (-0.45%) and Gangneung-si (-0.31) due to the influence of new housing supply, and Busan continued the downward trend centered on construction in Nam-gu (-0.35) and Sasang-gu (-0.34), and overall, the five metropolitan cities and local regions showed a continuous downward trend.
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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 13 consecutive months. It rose by 0.16% nationwide, slightly higher than the previous month (0.11%). The increase in the metropolitan area (0.31% → 0.40%) also expanded. Compared to last month, the number of rising areas (109 → 107) decreased slightly, the number of flat areas (0 → 1) increased, and the number of falling areas (69 → 68) decreased slightly. It seems that the increase increased due to the shortage of properties in preferred complexes such as new construction and areas near subway stations while the demand for jeonse remained steady.
In Seoul (0.54%), the increase was widened due to the continued shortage of properties centered on preferred complexes with steady rental demand. In the Gangbuk region, Seongdong-gu (0.80%) and Nowon-gu (0.65%) led the increase centered on large complexes, and in the Gangnam region, Yeongdeungpo-gu (0.49%) and Guro-gu (0.41%) showed the largest increase centered on new construction. In Incheon (0.40%), Jung-gu (0.54%) and Seo-gu (0.50) showed the increase due to the shortage of supply, and in the Gyeonggi region, Gwangmyeong-si (1.02%) and Siheung-si (0.71%) led the increase centered on major complexes with good living conditions. In the case of local areas, Sejong City (0.65%), which has good living conditions, showed the largest increase, while Daegu Dalseo-gu (-0.59%) and Gangneung City (-0.19%) continued to decline due to the influence of the number of occupants and the supply.
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The monthly rent price index also continued its upward trend, rising by 0.09% from the previous month. The increase rate slightly increased in Seoul and the metropolitan area, where monthly rent demand is firmly supported, but the increase rate was maintained nationwide, and the local area slightly decreased. Among the five metropolitan cities, the decrease rate was the largest in Suseong-gu, Daegu (-0.43%) due to new supply, and the increase rate in Sejong City (0.49%) was large due to increases in some preferred complexes with good living conditions.
Seoul (0.25%) rose mainly in Yongsan-gu (0.50%), Seongdong-gu (0.48%), Guro-gu (0.44%), Nowon-gu (0.43%), Mapo-gu (0.41%), Yeongdeungpo-gu (0.37%), and Seocho-gu (0.35%). Incheon rose mainly in Seo-gu (0.69%), Namdong-gu (0.42%), and Michuhol-gu (0.34%), and Gyeonggi rose mainly in Seongnam Bundang-gu (0.40%), Hanam-si (0.38%), and Gwangmyeong-si (0.36%).
In summary, as the housing market transaction volume increased significantly in July, nationwide sales transactions are continuing to be favorable, and monthly rents are also steadily increasing along with sales prices. 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 continues in preferred complexes with good accessibility to Seoul and excellent living conditions. However, Daegu and Gangwon-do regions, where supply has not yet been resolved, are unable to escape the downward trend.
2024.07 Officetel Price Index
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As the volume of officetel transactions has increased significantly, there are predictions that the officetel market is coming back to life. The nationwide officetel monthly rent price index has been on the rise for 13 consecutive months. The increase has been expanding as the preference for monthly rent continues in the officetel rental market. (0.06% → 0.10%) However, the sales market and the jeonse market have continued to experience high interest rates and investment demand has shrunk, but the decline has been slightly reduced due to the traction effect as the comprehensive housing market is recovering. (Sales: -0.16% → -0.10%) Despite negative factors such as aversion to jeonse and expansion of the target for reduction in the guarantee insurance limit, the decline has been reduced as rental demand has increased in areas with good transportation infrastructure. (-0.10% → -0.06%)
As the officetel monthly rent index rises, the yield is also improving. The nationwide officetel yield was 5.20%, up 0.01% from the previous month. It has maintained a yield of 5% since last year, and in particular, the five metropolitan cities (6.25%) and Incheon (5.98%) recorded higher yields than Seoul (4.52%). Considering that the highest interest rate for a one-year term deposit is 3.5% per annum, it seems to be a fairly high yield. As the yield increases, the demand for officetels is also increasing, and inquiries are continuing to focus on properties with high yields and low vacancy rates.
Accordingly, although the outlook for the officetel market 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 -0.19% in the provincial area compared to the previous month, with the metropolitan area continuing a downward trend for 9 consecutive months and the provincial area continuing a downward trend for 24 consecutive months. Officetels are approached more as investments than for actual residence, so unless interest rates fall and investment demand increases, it will be difficult for officetel prices to rise. In a situation where interest rate cuts are unlikely for the time being, it is suggested that we should wait and see for a while and watch the market until next year.
