2024.09 Comprehensive Housing Price Index
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The comprehensive housing transaction price index rose nationwide, in the metropolitan area, and in Seoul compared to the previous month, while the five metropolitan cities and local areas finished with a slight consolidation. The number of rising areas (109 → 102) increased compared to the previous month, the number of flat areas (3 → 5) increased, and the number of falling areas (66 → 71) increased, so the increase rate decreased. In Seoul, the number of inquiries for purchase decreased and transactions slowed due to loan regulations and the Chuseok holiday, and the wait-and-see attitude deepened, centered on short-term rapid increase complexes, and the purchasing sentiment weakened, so the increase rate decreased. Incheon rose mainly due to semi-new construction in major areas, and Gyeonggi showed a mixed trend by region, but mainly in areas with good living conditions.
In Seoul (0.54%), Seongdong-gu (0.91%) and Yongsan-gu (0.72%) led the rise north of the river, while in Gangnam-gu, Seocho-gu (1.16%) and Gangnam-gu (1.07%) led the rise for the third consecutive month, centered around the Han River complexes. In Incheon (0.21%), as in the previous month, the rise was led by Seo-gu (0.59%) and Dong-gu (0.4%) due to insufficient supply. In the Gyeonggi area, Bundang-gu in Seongnam-si (1.1%) and Hanam-si (1.03%) led the rise due to leading regional issues. On the other hand, in the case of the five metropolitan cities (-0.09%), the decline was the largest in Daegu Metropolitan City (-0.23%) following the previous month due to the impact of new housing and excessive supply. The prevailing opinion is that although there is an upward trend nationwide, we need to wait and see whether there will be additional upward momentum in the future as the transaction volume has fallen significantly compared to July and August.
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The jeonse price index also continued to rise while the five metropolitan cities and local areas remained flat. Nationwide, it has been rising continuously since June of last year, and in the case of Seoul and the metropolitan area, it has risen for 15 consecutive months. Nationwide, it rose by 0.18%, and the rate of increase slightly decreased from the previous month (0.27%), but the number of areas that rose compared to the previous month (122 → 122) was maintained, the number of areas that remained flat (2 → 5) increased slightly, and the number of areas that fell (54 → 51) decreased slightly, continuing the upward trend at a similar level to the previous month. While jeonse demand is steadily maintained, the number of preferred complexes with good living conditions and school districts continues to increase, and the number of properties in short supply due to steady demand continues to increase, leading to an increase in listing prices and transaction prices.
In Seoul (0.55%), the Gangbuk region led the increase, similar to the previous month, with large complexes in Seongdong-gu (0.83%) and Nowon-gu (0.66%), while in the Gangnam region, with new construction near subway stations, Yeongdeungpo-gu (0.68%), Seocho-gu (0.67%), and Gangnam-gu (0.56%) showed the largest increase. In Incheon Metropolitan City, the increase was led by major complexes with good living conditions, such as Seo-gu (1.43%) and Jung-gu (1.06%) in Incheon, and in the Gyeonggi area, Hanam-si (0.76%) and Yeongtong-gu in Suwon (0.74%). Among the five metropolitan cities, the decline rate was the highest (-0.24%) due to the new housing supply in Daegu, which was the same as the previous month, and among local areas, the decline rate was the largest in Gumi-si, Gyeongbuk (-0.22%).
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The monthly rent price index continued its upward trend, rising 0.11% despite a slight decrease in the increase compared to the previous month. In Seoul, the upward trend continued due to the continued shortage of properties centered on new construction in areas near subway stations with good school districts and transportation environments. In Incheon, the increase was led by semi-new construction in Seo-gu and Bupyeong-gu, and in Gyeonggi, the increase was led by preferred complexes with good living conditions. The five metropolitan cities showed a slight decrease compared to August (0.03% -> 0,02%), but continued to rise. In the case of local areas, as with the jeonse price index, the decrease in Daegu Metropolitan City (-0.21%) was large, but Gyeongnam and Sejong maintained their increase by turning from decrease to increase.
As the housing market transaction volume has decreased significantly compared to July and August, the majority opinion is that we should wait and see whether there will be additional upward momentum in the sale price, but as the demand for jeonse and monthly rent continues to increase, the jeonse and monthly rent price index is expected to have additional upward momentum. In particular, as the screening for jeonse loans becomes stricter, the demand from tenants switching from jeonse to monthly rent is expected to increase, so the upward momentum of the monthly rent price index is expected to be strong.
2024.09 Officetel Price Index
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As officetel transactions increased significantly, the nationwide officetel monthly rent price index showed an upward trend for 15 consecutive months. As the preference for monthly rent over jeonse continues in the officetel rental market, the officetel jeonse price index turned downward. (0.10% → -0.05%) The sales market also showed a slight increase in the decline as high interest rates continued and investment demand shrank. (-0.12% → -0.13%) As the officetel monthly rent index increased, the profitability is also improving. The nationwide officetel profitability showed a continuous upward trend, rising 0.02% from the previous month to 5.40%. It has maintained a profitability in the 5% range since last year, and in particular, Daejeon (7.76%), Sejong (6.39%), and Gwangju (6.31%) recorded high profitability. In the case of Seoul (4.87%), it was the same as the previous month, but recorded the lowest yield. As the yield continues to rise, inquiries are continuing to focus on small-sized properties with high yields and low vacancy rates. The regional officetel sales price index recorded -0.06% in the metropolitan area and -0.37% in the provinces compared to the previous month, with the metropolitan area declining for 11 consecutive months and the provinces declining for 26 consecutive months. Although the domestic base rate was slightly lowered by 0.25% (3.5% -> 3.25%) on October 11, the first time in 4 years and 5 months, it will take some time for the base rate cut to be felt in reality, and most people agree that we will have to wait and see how much of an appeal this cut will be to actual buyers.
