Yes, bank loans are bad news that push up house prices. Professor Shim Young-seok, a real estate professor at a general graduate school, and Professor Na from the real estate department at IAU in the United States have joined us. Please welcome them. Hello. In the end, if you have to borrow money from the bank to buy a house, the interest rate has a significant impact on house prices. There are many analyses like this. Currently, the bank's composite-type lowest interest rate level is at its lowest level. The lowest interest rate has dropped by 2% annually. Well, there may not be many people eligible for the lowest interest rate, but Professor Kwon Dae-joong, if it's a 2% annual rate, is this the first time in nearly three years? That's right. The base rate is 3.5%. However, a 2% drop means that as of May 3, the fixed-rate loan has a bottom of 2.94% and a top of 5.44%. This is a significant drop now. It dropped from 3.4 to 3.0.5%.

The interest rate on this loan has dropped by 0.54%. When the interest rate on loans decreases, it is good news for the real estate market. First of all, it means that the burden of interest payments at stores is reduced. However, the fixed interest rate is not much lower than the variable interest rate. So, in most cases, those who initially received a fixed interest rate when interest rates were low are actually at an advantage now. On the other hand, for new borrowers, there is a high possibility of switching to a fixed interest rate. Currently, the fixed interest rate has decreased a bit, reaching a minimum of around 2.94% or 2.95%. This is the minimum interest rate standard, so when you actually take out a loan, it may not be easy. In any case, theoretically speaking, the overall average interest rate for bank mortgage loans is gradually decreasing. There are two main reasons for this. One is that the government has set the policy rate for new loans at only 1.7%.

The special supply of newborns, special supply fees, and special supplies have all increased significantly. Secondly, because it is expected that interest rates will fall, banks are proactively lowering them little by little. Due to the decrease in bond yields, it seems that interest rates have also decreased. If you go to a bank to get a loan, it could be around 4-5%, or even higher. For mortgage loans, it could be around 6%, so non-collateral loans might be around 4.5%. In any case, on average, it seems to be decreasing a bit. If it decreases, it reduces the interest burden, so how much will this push up housing prices? Is the relationship between interest rates and housing prices really strong? Recently, many people are taking out loans to buy houses, so the impact is significant.

As mentioned, now, regarding this 2% range of mortgage interest rates, as I have confirmed, this includes something related to people with disabilities and the Ministry of Land, Infrastructure, and Transport's electronic contract. Realistically, the interest rate that ordinary borrowers can probably get is around 3.2%, as far as I know. Actually, it's around 3.22%, and on average, I heard that those who newly apply for mortgage loans get around 3% in the latter half or early 4%. So, it's a bit unusual. It would be good to explain this a bit. When it comes to the media, if this is just thrown out there, there might be quite a bit of confusion, I think. It might be confusing why the interest rate only for me is high when it has dropped to 2%. It seems like there might be some misunderstandings. Yes, but anyway, recently, banks have also been doing some business because there have been cases of refinancing loans recently.

We are implementing measures, so the demand is currently increasing slightly. It seems that the current situation is influenced by these factors. Anyway, a significant portion has already been reflected, as mentioned earlier. Both banks and most of those buying houses are expecting interest rates to fall in the future. Therefore, products like hybrid loans, as mentioned earlier, are becoming popular recently. These products allow you to start with a fixed interest rate for 5 years and then switch to a variable interest rate. If you take out a loan with a fixed interest rate, you won't be able to switch to a variable interest rate. It is clear that interest rates will decrease from the end of this month or next year.

There is a penalty for early situations every three years at 1%, 1.5%, 2%. For example, you can't change it, and at that time, the prohibition is reduced, so it can be reversed. If you lower the fixed interest rate loan like this now, even if you join, if the variable interest rate goes down, after 2 or 3 years, it could become a high interest rate. In reality, because they receive more than 3% in the market, perhaps the banks reflect it in advance and lower some parts. So, if it drops even a little, the interest expenses decrease a bit, so it is expected in advance, and people are willing to jump into buying houses a bit. This kind of psychology is actually traded because of interest rates. There are psychological factors that make you think that it will go down in the future, but the biggest factor is that high interest rates are continuing now, and as oil prices rise, raw material prices are also rising. New supply.

Prices have risen too much for new customers, so the existing housing prices do not reflect that. Due to the high prices of new housing, the prices of existing homes are also rising. If new redevelopment, reconstruction, or new apartments are built, the presale prices are so high that it is impossible to build a new house. With the current prices, this leads to a speculative rise. When the prices of new housing rise, existing housing prices inevitably follow suit. From a consumer's perspective, there is anxiety that if you do not buy a house now, you will have to buy at a higher price in the future. Therefore, despite the high interest rates, there were quite a few transactions, around 5,000 units last month and about 7,000 units in Seoul.

When you go into the city, in April, last month, it's not for all homes, it's just a few thousand. So, I will give you the statistics later, but just in Seoul, currently around 7,000 homes have been traded, and in July, June, and May, it's close to around 5,000 homes. So, looking at the volume of home transactions, in Seoul, in April and March, it's not 3,000, not even 3,000. In Seoul, just apartments, around 4,800 to 5,000 units now. If we look at all homes, well, the total number of apartments is around 44,000 units, so a lot of transactions are happening in the metropolitan area. So, maybe this is because of the possibility that if you don't buy a home now, the future home prices may rise. Areas like Songpa, Nowon, Dobong, and Gangbuk-gu, where there were no transactions, are now turning into pluses. So, yes, right now, there are so many new.

Due to the high housing prices, people call existing houses newly constructed apartments. Newly constructed apartments will also increase accordingly. If you don't buy now, will it be too expensive to buy in the future? What about this psychology? How should we see it? Yes, there are certainly aspects like that. Currently, in 2021, housing prices have risen a lot, and in recent three years, the trading volume has decreased sharply. People hardly bought. Just last December, there were about 18 transactions for Seoul apartments. However, now in April, I remember there were about 4,000 transactions, and as of today, in May, there are 481 transactions. So, as of today, it's almost reaching around 5,000 transactions, right?

There are about four months left in April, so what is the significance of that now? It means that we are now approaching an average level. Approximately, the amount of Seoul apartments being traded is around 5,600 to 6,000, which is close to the average. So, it is meaningful that it is approaching this level. Currently, the housing market is mostly a buyer's market. Yes, if you look at the recent movements, most people who are changing homes are mainly in the Gangnam area or around Mapo. In these areas, rather than being areas with many initial residents, they are places where people tend to move to as their next home. However, it has been about four years since the lease law was enacted. Therefore, as the four-year contract renewal rights are being exercised, properties are coming out for sale, and these people are now either buying or selling again.

It's about transitioning. While living in a jeonse, yes, the demand is gradually increasing recently. So, what we need to pay attention to now is the demand for switching within the actual demand. In fact, we have created nearly 4,000 of these, but recently, are you purchasing for the first time? There is still a category that has not entered the market yet. Investors in this area are almost non-existent. When we consult with them, creating about 5,000 of these through actual demand alone is quite significant. As we discussed earlier, continuing in the Gangnam area, moving on to May 20th, Nodogang, Geumgwanggu, all transitioned to a plus status. Yes, so this trend is spreading, which seems to be quite significant. There is one thing I need to correct. Yes, the trading volume in April was 4,840 units, and the Ministry of Land, Infrastructure, and Transport announces this at the end of each month.

This is the data. In March, it's 3,480 won, and the total of the two is almost 7,800. Yes, when combined, so in April, it's 4,840. This month, it seems like we'll go over 5,000, just like our professor said. So, until today, it's 4,800, but this will be reported by the end of May, so by the end of June. Since it's reported a month later, if we report it now, it will be the standard at the end of May. This is based on the housing statistics that the Ministry of Land, Infrastructure, and Transport announces at the end of each month. So, if it's announced at the end of June, it will be delayed by one month from the end of April and May. If it's 4,840, it has increased significantly. But among Professor Shin's remarks, a considerable portion of the current real estate transactions is actual demand, whether it's demand from existing homeowners looking to switch or demand from those who used to rent.

Changes are happening there, and I agree with that. These parts, well, a little... this is speculation. The increase in trading without the support of investment demand means that the market sentiment is changing. This is definitely only in Seoul. In fact, it's only in Seoul. Regions still use it a lot. But, um, in the case of purchasing a house, the two-year residency requirement is still in effect. The two-year residency requirement according to the Housing Act. Yes, because of that, it's not easy. But now, the market is being significantly reorganized around actual property owners, so maybe the interest rates will decrease. And now, speculation demand or artificial demand is not greatly affected by interest rates. If it's for investment returns, they just go in and tie it up. But actual demand is quite sensitive, right? Recently, the increase in trading volume is mostly due to a lot of actual demand and artificial demand.

So, in my opinion, there are some parts in the non-apartment section. Recently, there have been many cases of buying back the non-apartment part, not only in Seoul but also in other areas. However, in the non-apartment section, there are many cases where it is mostly converted to monthly rent. Also, now that the number of purchases has decreased a bit, areas where redevelopment, reconstruction, or street house maintenance are taking place had a lot of properties coming out a month ago. But about half of them disappeared about two weeks ago. General properties, as well as auction items, mostly have issues remaining. And now, when an apartment in Gangnam comes out, it is just sold at the bid price, but it seems like there is a slight increase in transactions in the non-apartment section. Once the Ministry of Land, Infrastructure, and Transport releases the transaction volume by type, it will be revealed, but recently, the demand for rental housing or investment seems to be shifting slightly from apartments to non-apartments.

In the Via Vaba section earlier, when talking about different regions, you mentioned that there is a gradual increase in points in Nowon, Dobong, and Gangbuk. So, in Seoul, what about the gap between Gangnam and non-Gangnam areas or the gap between Seoul and other regions? The gap in Seoul itself seems to be widening a bit. Is this correct? Yes, the rate of increase is quite noticeable. Currently, there are two areas where prices have risen by more than 0.3% on a weekly basis, Seongdong-gu and Seocho-gu. Seongdong can be considered the most preferred residential area for the MJ generation, and Seocho-gu, on the other hand, seems to be experiencing the balloon effect of land transaction restriction zones. When Gangnam-gu rises by 0.3%, in annual terms, it's about 15%. So, this is a significant...

It can be seen as a strong upward trend. However, in the case of Nodongang area, it is less than 0.1%. So, now the inflation rate is slightly lower than the income growth rate. Therefore, at the current level, we can say that this data is not very significant. In regions like Paju, it is not looking very good at the moment. However, just because it's a regional issue, you don't need to look at the whole picture. Recently, in terms of annual basis, areas like Gangwon Province have turned into a positive trend cumulatively. Gangwon Province, for example. So, when we look at these regions, it's a difference in the amount of new housing supply. In areas where there is a lot of new apartment supply recently, regions like Paju still haven't fully utilized their strength. Yes, that's right. Daegu and Busan are similar in this regard, but there is a slight improvement trend happening little by little.

Why is that? Because the reasons for the drop were all the same nationwide. The interest rates increased by almost seven times rapidly over a year. Now, due to this situation, there have been some positive trends recently. For example, in areas like Suseong-gu in Daegu, there was a shift to the positive, then back to negative. These kinds of trends are gradually appearing. So, when the supply of newly constructed homes decreases next year, there will be some strength gained. However, up to now, there haven't been clear positive signals in these aspects. But one thing to note is that the recent trend itself is steadily continuing. Therefore, if we want to relax regulations, we need to change the law.

Even from the perspective of the Democratic Party, they are expressing their stance that even if the comprehensive real estate tax is eased, they will ease it for housing. Then, we will inevitably be concentrated in one house. In that case, if you consider the situation in the outskirts of Seoul as difficult, the conditions of the real estate market in those areas will continue. In terms of policy, the polarization between the metropolitan area, including Gangnam-gu, and the outskirts of Seoul or the entire metropolitan area and the provinces could widen and deepen. This is how we can anticipate the current situation. In the case of Gyeonggi Province, areas like Siheung, Gwangmyeong, Bucheon, Suwon, and Seongnam, where there are development opportunities, have been rising continuously from the second to third week of May. According to weekly trends, this is data from the Korea Appraisal Board. In local areas, as our professor mentioned earlier, almost all.

The prices have been falling so far, and Incheon has increased quite a bit. Gangwon Province and some parts of Jeolla and Jeju have also risen slightly, but there doesn't seem to be any special materials. It seems like the local economy is still struggling. Therefore, there seems to be a polarization between the capital area and non-capital area, as well as between Seoul and the capital area. It seems like the housing prices in the regions are gradually recovering, and measures have been taken to stop the decline, but the effects are not significant. In the case of purchasing a property in 83 disappearing cities, there are not many housing supplies below 85m² or 4 units in the disappearing areas. Yes, the policy effectiveness is somewhat lacking. Also, another issue is that if the focus is only on major cities, it would be fine, but major cities are still insecure. For example, Gwangju is also...

Last month, two construction companies that started selling the development rights said that all 22 units were public land donations and supplied over 2,000 units, but only about 30% were sold. Oh, 30%, right? But actually, it's Gyeonggi Province, not Jeolla Province, Gwangju Metropolitan City. Gwangju Metropolitan City has been able to withstand housing prices. However, the situation is different now. So, if local economies are not revitalized, it's not easy to live there. Yes, something like a bit of overall equalization seems necessary. The polarization is deepening. But with the policy announced today, the second stage stress DSR, the total debt service ratio, which now tightens bank loans more, will be implemented from July onwards.

Suddenly, they postponed it for two months. Yes, some people view this as having a stimulating effect on housing prices. Why did this change suddenly? Doing this just a week ago, I see a problem. Because doing this in July, there is a side where loans are somewhat concentrated. There is a perspective of having taken out loans in advance. Yes, yes, it seems that now the second stage, so the first stage was 25%, and the second stage is now 50%, not applying the stress of DSR fully. Originally, it was decided to apply 100% from January next year. Yes, as a result, demand is increasing, and there are aspects that have risen a bit. Clearly, yes, but leaving this for a week and doing it now, anyway, from the government's perspective, there are high-risk loans of about 15%. People who borrowed a lot for their income, etc.

People might suddenly feel joyful now, so there could be various societal issues like bankruptcy, so it seems like you've decided to give some time for a month or two. And naturally, it seems like even the third stage might not happen until the second half of next year. Yes, that's how it seems internally right now. It might be delayed as well, not until the second half. I think we need a bit of a gap between the second and third stages, so let's postpone the second stage for two months. With policies changing suddenly like this, in preparation for the implementation of such policies, loan plans may have been made by financial companies. It seems a bit problematic to be so indecisive. In fact, the Ministry of Land, Infrastructure and Transport now sees the market as just starting to revive. Yes, so if regulations are imposed again now, it could affect the real estate market and the economy market, you know, from that perspective.

Now, there are voices saying that when the economy is not doing well, regulations should be relaxed. Is it the government's intention to revive the economy? Although the local areas have not revived yet, so rather than easing the regulations now, it seems like they hope to delay a bit for the economy and the real estate market to revive. But if house prices rise, it will be burdensome, right? They want transactions to happen, even if it's trading at a higher price. Currently, compared to the peak price, the current housing prices are still quite low. Compared to the second surge in November last year, areas like Seocho, Gangnam, and Songpa have almost increased by 98% to 99%. However, compared to the first peak, was it last year or 2022, the prices are still around 95% lower, right? Looking at the mountains, Seoul is still about 4% lower, and the average peak.

In comparison, Gyeonggi Province is down by 6.47%. This is data from the Korea Appraisal Board. Generally, it is still considered low compared to the peak. However, I don't think the government needs to push real estate prices back up to the peak. No, they hope for a bit of trading activity. From that perspective, it is necessary for local tax revenue to increase now. Also, currently, there is talk of abolishing the Comprehensive Real Estate Tax, but it seems impossible to me because the ruling and opposition parties have not reached an agreement. However, if there is some adjustment, local taxes will increase. It's like 50% of local taxes going to the local government when transactions occur, so if local tax revenue increases, the central government's shared tax will decrease a bit. So, there seems to be a balance if transactions increase. Anyway, policies need to be consistent, and preparations have been made accordingly. Only those who are prepared are a bit surprised by this.

The sudden change in policy doesn't seem desirable. Another issue that was briefly mentioned earlier is the construction cost. The construction cost has increased significantly, leading to conflicts between the construction company and the members of the association, causing construction to be halted. Now, many reconstruction sites are emerging in Gangnam, including Cheongdam-dong Cheongdam L'well, which is highly notable. Here, there is also a problem, and the construction is expected to be suspended. Yes, the construction is scheduled to be halted on September 1st due to issues related to construction costs. In fact, this decision was already made by the executive branch before. Now, bringing it up again has caused problems. Currently, the progress of the construction is about 50%, but only 5% of the construction cost has been received. Therefore, from the perspective of the construction company, there are concerns about these issues resurfacing.

Also, it's not easy for them to decide on the parts that need to be negotiated. So, originally, they planned to start the general construction work in July, but now it's being delayed. Since the funds are not coming in, it's a bit unclear in the long run. Therefore, they notified the suspension of construction on September 1st. I heard that the Seoul city is dispatching a coordinator yesterday. So, it would be great if it's well coordinated. This situation is not only about Cheongdam L-1, but most of the disputes are happening at the redevelopment sites. Due to the increase in construction costs, disputes between the association and the construction company continue to arise. So, this recent sharp increase in construction costs can be seen as a problem. In this situation, it is necessary to activate redevelopment to increase housing supply.

Government policies that are meant to induce are not being implemented well, right? The government has now issued standard contracts due to construction costs, but isn't this already in the stage of being carried out under contracts? There is no enforceability. In my personal opinion, there is a need for construction cost verification. For example, in the case of construction cost verification, it was submitted to the Korea Appraisal Board, but upon checking, it was not submitted. Everyone knows it was submitted, but it is still pending. Even if it is submitted, it takes more than three months. If it exceeds one trillion won, it should be done within three months, but they consider it will take more than three months. Even if it is verified, both parties, the contractor and the construction company, need to agree, so there is no enforceability. Therefore, it is necessary to reach an agreement, but the organization verifying construction costs needs to be expanded. Currently, only the Korea Appraisal Board verifies construction costs.

It's what we're doing, so most of the disputes are now about an increase in construction costs. The problem is that there are many issues where the head of the association needs to go again for an increase in progress beyond the actual construction cost. For example, if there is a case where the decision of the association's general meeting is not passed through, and they want new high-quality materials, from the perspective of the construction company, the cost goes up due to this, including support costs. So, in the end, the construction company calls for a large amount first because it hasn't been verified. For example, they call for 900 million won or 1 billion won for 3.3 pyeong, and then reach an agreement later. If the final decision is over that amount, then they reach an agreement. That's right, the Hanshi 2nd complex was small in scale, with a small number of households, and although it was a high-rise, it was in Banpo, Seocho. The Hanshi 2nd complex was 3.3 pyeong per unit, costing 1.3 billion won. Oh, I see.

Most of them are about 9 million won, even if it goes up now, so there is a problem with the construction company. First of all, they call for a high amount and try to negotiate with the association, so the agreement is not going well. Yes, that's right. These days, the jeonse market continues to rise. But isn't the jeonse market really unpredictable? Do you think there is a possibility of stabilization? In the case of the jeonse market now, in the past, it was a matter of whether there were listings or not. But now, as properties using the right to demand contract execution are coming out, it is transitioning to a price issue. So, in the field, prices are rising considerably. Anyway, the variable for jeonse prices is the amount of move-in inventory. If there are many move-in inventories, the jeonse prices tend to drop a bit. However, the possibility of an increase in move-in inventory in the near future is not high. Also, due to issues like jeonse scams, it's shifting towards apartments.

Now, there is a problem with the increasing jeonse prices, and also, after four years, there is the overlapping issue of the Lease Protection Act. Recently, we have been talking about the occupancy supply, which is a new trend. However, the supply in the reconstruction sector is also scarce. Therefore, in the case of sales listings, there are over 80,000 units in Seoul, while jeonse listings are about 27,000 units. Generally, the number of jeonse listings should be three to five times higher than sales listings. Jeonse listings should be significantly higher than sales listings. In the current situation, the listings are at a third of the usual level. So, in reality, it is quite difficult to avoid this situation. Therefore, there aren't many options. In my opinion, in some aspects, it is acceptable to convert some of the jeonse demand into sales. Because, in any case, the rental market like jeonse is for the common people.

Since you live there, it's actually good to buy a house. Recently, regarding the upper limit on housing prices, the government has imposed a three-year ban on actual residence. But I also see it as risky whether the monthly rent will really stabilize after three years. I think it's necessary to make some adjustments quickly, like abolishing it sooner. Yes, it seems that there is no solution due to the imbalance in housing supply and demand. So, people who seek monthly rent are really frustrated. The housing market is polarized. What does that mean? Due to many incidents of buying and selling monthly rent, there is a trend towards apartments, and non-apartment areas are increasing in sublease or monthly rent, and also the number of listings is increasing similarly.

It's like a wound, lacking and having a lot of non-apartment parts, so people living in the multi-family townhouses prefer to rent rather than own because of this non-apartment part. Anyway, because they prefer apartments, but the supply is low. The contract for this time ends, so the properties coming out as our professor mentioned are now limited. That's why a lot of them come out at the end of July and early August. In that month, the possibility of the lease price increasing more than the sales price is high. What about the lease? Not a lot, but it seems like the lease price will increase a lot. However, if you can't afford the apartment anyway, you have to go for a non-apartment, but since people don't prefer the non-apartment part, they end up going for a half-lease. From the perspective of the demand side, the burden of going is increasing again, the amount of expenses.

As it gets higher, yes, I understand. As I was talking, time has passed. I've heard about the decrease in loan interest rates at the bank, and even about the housing rental market. Professor Kwon Dae-jung, a professor of real estate at Sogang University Graduate School, was here. Thank you again. Thank you.

[집중진단] 주담대 금리 2%로 하락…집값 상승 불러올까?

[집중진단] 주담대 금리 2%로 하락…집값 상승 불러올까?