Future of Real Estate: Population Decline and Market Trends

Real estate experts must understand the evolving preferences of younger generations to navigate future market challenges effectively.

### The Impact of Population Decline on Real Estate
The real estate market is currently experiencing a **significant increase in apartment prices**, with a total rise of **15% or more** over the past year. The population decline, which has been ongoing for four years, is expected to lead to a simultaneous **decrease in both population and households** by 2040. Additionally, climate change may exacerbate issues like **gentrification and natural disasters**, potentially impacting the housing market in the future.

### The Future of Urban Living and Real Estate
Landslides are expected to increase, making urban living more important, with a shift in **favorable home orientations**. The future may see a polarization in real estate, with significant assets in rural areas and a division in **local survival**. High-density residential facilities and smart cities are likely to become the norm, while the housing market may feel the impact of a **demographic crisis** by 2030.

### Demographic Trends and Housing Market Insights
Gwangju Suwan-dong and Busan's Myeongji-dong have lower average ages, resulting in a **later and less severe impact** from population decline. The Japanese housing market is experiencing a legal crisis, with housing prices **rising despite the population decline**. The increase in liquidity and the continuous growth of households in Japan have contributed to the **rising housing prices** over the past **12-13 years**.

### The Polarization of Tokyo's Real Estate Market
Tokyo's real estate market is experiencing a decline, with **23.9% vacancy**, while tower mansions and regular apartments are seeing a price surge, indicating **extreme polarization**. The spatial desires of the millennial and Generation Z cohorts are becoming significant factors in the market, with their preference for **urban-oriented spaces** and **non-face-to-face interactions**. The shift towards online consumption and mobile platforms is causing a **serious oversupply** in commercial districts, making the dream of **steady rental income** from commercial properties **outdated**.

### The Transformation of Commercial Spaces and Real Estate Trends
There is an oversupply of commercial spaces, leading to **empty buildings and financial struggles for developers**, who are now converting them into **high-end officetels**. The younger generation is shifting away from traditional investment strategies and is now focused on **buying homes as living spaces**, with the **1982-born Kim Ji-young generation** driving the current real estate market. The trend in real estate is shifting from **gap investing to upgrading living spaces**, with a significant rise in house prices in areas like **Gangnam and Seongdong-gu** over the past year.

### The Changing Landscape of Investment and Housing
The younger generation approaches investment like a game, showing **high financial intelligence but also impatience**. In contrast, the older generation has a more passive, real estate-focused approach, with a trend towards **multi-habitations and second homes**. The market is evolving rapidly, with a shift towards **global financial assets and non-face-to-face interactions**, making it important to **adapt quickly to the changing flow**.

### Navigating the Future of Finance and Real Estate
The speaker highlights a common **lack of knowledge** among those in finance and suggests a shift towards **global financial assets** for relative safety. They emphasize the importance of understanding the **spatial desires of the younger generation** to mitigate the impact of population decline. The speaker also raises questions about the government's response to **rising housing prices and household debt**, suggesting that **lending regulations may have a stronger impact** on the real estate market than interest rate cuts.

### Insights on the Housing Market and Investment Opportunities
The housing market is expected to **stabilize rather than drop significantly**, with local apartment indices showing **slight growth**. The high proportion of fixed-rate mortgage loans in the country is influencing the market, with a potential **increase in transactions** in the metropolitan areas outside of Seoul. When considering investment opportunities, it's important to view areas by living zones and consider the **desires of the younger generation**, as they shape **pricing and trends** in the market.

### Understanding the Future of Real Estate: Insights on Population Trends and Market Dynamics
* 🏡 Real estate is complex, and it's essential to differentiate between the **near future and the distant future**, as this understanding can **significantly impact market interpretations**.
* 🚶 A personal experience of walking around Yeouido highlights the **importance of observing current conditions** to grasp the **dynamics of housing prices and market balance**.
* 📈 The price of apartments in Seoul has risen approximately **6.6% this year**, following a **10% increase last year**, indicating a total rise of about **15% over this period**, which requires **careful analysis rather than premature conclusions**.
* 👥 As the population declines, extreme polarization in the real estate market is expected, leading to a scenario where the **wealthy gain more** while the **less fortunate may struggle even more**.
* 🌍 Climate issues and demographic changes are anticipated to transform urban living, necessitating a shift towards **smart cities and mixed-use developments** to accommodate **evolving needs**.
* 📊 The trends in the real estate market are influenced by generational shifts, with younger generations showing a **preference for urban living** and **redefining their spatial desires**, which is crucial for understanding **future market dynamics**.
* 💰 The current landscape indicates that the focus should shift from **local real estate** to **global financial assets**, as younger generations prioritize **financial literacy** and adapt to **changing consumption patterns**.
* 🔍 Ultimately, understanding the **desires of the younger demographic** can provide valuable insights for navigating the real estate market amidst ongoing **population shocks and economic transformations**.

LiveWiki

박원갑 부동산수석전문위원, "30대 여성 공간 욕망이 아파트값 좌우한다"

박원갑 부동산수석전문위원, "30대 여성 공간 욕망이 아파트값 좌우한다"