The price increase rate of housing in Gangnam's three districts and apartments shows a significant difference compared to the rates in the surrounding areas of Jungnang and Gangbuk over the past ten years. The polarization is not just at this level; if you look at the price differences between high-end and low-end apartments, it is shocking. In 2021, at the peak of the asset market, the average price of the top 20% was 4.14 times that of the bottom 20%. Now, as of 2024, the price of the bottom 20% has dropped further, from 540 million to 488 million. Meanwhile, the average price of the top 20% has risen to between 2.2 billion and 2.5 billion, widening the gap to 5.2 times. 

Hello, I am Choi Woo-shim. Today, I have come to read the news from Naver Premium Content. I have been living under Naver Premium Content for about two years now, summarizing and posting major news items here.

Today, I will share some important news. First, regarding the polarization in real estate, it seems that even within Seoul, not all areas are the same. This will likely be a significant news item for the first week of September. 

The housing transaction statistics for July have been released, and it turns out that only Seoul saw an increase in transaction volume. Compared to the long-term average, the transaction volume in Seoul has increased, while all other regions showed a uniform decline. 

Specifically, if we look at the cumulative apartment transaction volume in Seoul from January to July over the past five years, it has increased by 11.8%. In contrast, all other regions are experiencing significant declines, with the national average also showing a dramatic decrease. When we combine apartments and non-apartment transactions, apartments are down about 13%, while non-apartments have seen a staggering 44% drop. The non-apartment transaction market has essentially collapsed; they are just not selling.

In fact, apartments in Seoul have been sold, but apartments outside of Seoul are really not selling. I think it would be good to think of it that way. If you look at the monthly transaction volume in Seoul, it has broken through with the market boom. The transaction volume in July has now exceeded 8,000 cases, so the transaction volume for August will begin to be recorded. However, I believe that the volume will come down to around 5,000 to 6,000 cases, dropping to about 8,500. Furthermore, I think the transaction volume will continue to decrease as we approach the end of the year. In the long term, it only shows a few months' worth of data, which is just two years, and while it has risen significantly compared to that time, historically, it has always been at a certain level. In 2023, there was a significant contraction in transaction volume, and in the second and third quarters of last year, the introduction of 50-year mortgage loans and special housing loans led to a recovery in transaction volume in the fourth quarter of last year.

After the special program ended, there was a bit of a downturn, but then the market started to recover and rise. I believe that around August, we will see a peak, and from September onwards, I expect a slowdown in the rate of increase, which will likely lead to a decrease in trading volume. However, Seoul is not the same as it used to be. If you look closely, areas like Gangnam, Songpa, Seocho, Gangdong, and Seongdong, especially Gangnam, Songpa, and Seocho, have shown a significant difference in the rate of increase in housing prices compared to districts like Bupyeong, Jungnang, and Gangbuk over the past ten years. This indicates a complete polarization in the market. The disparity between high-end and low-end apartment prices is shocking. In 2021, we were at the peak of the asset market, and even then, the difference between high-end and low-end apartments, particularly the top 20%, was quite pronounced.

The average price of the bottom 20% was 4.14 times, but as you can see, the price of the bottom 20% has also decreased based on 2024 data. It has dropped to 540 million won, down from 488 million won. The average price of the top 20% has widened from 2.2 billion to 2.5 billion won, which is now 5.2 times higher. So, in Seoul, there are apartments priced at 480 million won and others at 2.5 billion won in the top 20% and bottom 20%. This is because ultra-high-end trophy apartments have surged in price, causing the average price to rise significantly. Therefore, I would like to explain that this disparity has occurred. The price ratio of apartments has also shown that, as you can see, the ratio in Seoul is around 5.6 times to 5.17 times. Nationwide, the same trend is observed. The overall ratio has surpassed five times, and there are still many very cheap apartments available across the country, including those priced below 100 million won.

There are still neighborhoods like this, and it’s quite significant that the difference in Seoul is over ten times. This news is very meaningful. It seems that only the real estate market in Seoul is booming, which is a good way to think about it. 

As for other news, various transaction data for July has been released, and you might want to take a look at that. The number of unsold properties has slightly decreased, going from 74,000 to 72,000. After a brief spike in unsold properties, there hasn’t been a significant change, and unsold properties in the provinces continue to accumulate. In the metropolitan area, there are only 14,000 unsold properties, while the provinces have 57,000. The situation in the provinces is hardly improving. 

Moreover, if new developments begin in earnest, it seems more problems will arise, as the provincial market is still very sluggish. Therefore, it’s important to note that this is not a complete recovery.

I will provide you with the information. The 2030s are buying homes, and according to the Ministry of Land, Infrastructure, and Transport, a member of the Democratic Party submitted some data regarding Korean real estate. If you look at it, the proportion of home purchases by those in their 20s has significantly decreased, while it has increased for those in their 30s. The percentage for those in their 20s has dropped to 5.3 and 5.6. I think this is related to the cryptocurrency boom, as I have seen many people in their 20s buying homes during that time. It seems that the decline we are seeing now is naturally occurring due to events like the Luna crisis in May 2022 and other issues. Those in their 30s, on the other hand, are starting to buy homes for the first time. They typically begin purchasing homes around their eighth year of working, so their proportion remains consistently stable. It's quite remarkable that people in their 20s buying homes was once considered a miracle, but in the past...

University students were going crazy, saving millions of won for gap investments around 2020 and 2021. When I think back to that time, the cryptocurrency prices were at their peak, and it seems like many people in their twenties were buying in. Now, prices have dropped significantly. In most countries, this is the norm. 

If you look at where people in their twenties and thirties have been making purchases, you can see that in 2023 and 2024, certain areas are popular among those in their thirties and twenties. The thirties tend to buy in districts like Seongdong, Songpa, Nowon, Gangseo, and Gangbuk, while areas like Nowon, Gangseo, Guro, and Seongbuk are favored as well. These are regions where housing prices are not very high, making them attractive for home purchases.

In fact, there are many discussions about how even trophy apartments are seeing a lot of transactions, and while that is true, the underlying trends in housing transaction volumes are also important to consider.

In areas where housing prices are not very high, there is a significant amount of housing transactions occurring. Therefore, I would say that such figures are quite numerous. However, since there isn't a huge influx of investment demand, the rate of increase in housing prices is also not high. If you look back at the video we filmed in Nowon-gu nearly two years ago, you can see how housing transactions were conducted at that time, and how properties bought at the end of 2021 have struggled since then, not recovering after 2022. You might find it helpful to check those details. 

Additionally, there has been a lot of discussion regarding loans and related issues. I have summarized the notion that the main culprit behind the rise in house prices is the loans. The budget for the Ministry of Land, Infrastructure and Transport for 2025 has been released, and this year's budget is higher than last year's.

The national budget proposal has been released, and the Ministry of Land, Infrastructure and Transport announced a budget of 58 trillion won for 2025. This marks an increase of about 3% compared to this year, amounting to 677 billion won. However, it seems that the government will adopt a somewhat austerity-oriented approach next year. In any case, significant funds will certainly be allocated to education, local administration, national defense, and welfare, with nearly 250 trillion won going towards employment and social welfare. It’s good to keep in mind that these major expenditures are all included here. The rest of the budget is structured accordingly, so for those interested, it would be worthwhile to take a look at the budget. The real issue, however, is that revenue is not coming in as expected. National tax revenue has been underperforming, leading to a significant deficit, which is a problem. This situation is likely to worsen in the future, so it’s important for everyone to be aware of this.

When you think about the exchange rate of a specific country like Korea, it is essentially the present value of that country's future tax revenue cash flow. However, in countries like ours, where there is a rapid increase in birth rates, there tends to be higher pressure for the currency to weaken. Of course, in the short term, fluctuations in the exchange rate can be influenced by industrial factors or economic conditions, as well as changes in the value of foreign currencies like the dollar. But in the long run, the value is ultimately assessed based on the country's cash flow. In that regard, we are currently in a situation where there is some upward pressure on the exchange rate. Nowadays, when the dollar suddenly weakens and the exchange rate in our country drops significantly, leading to a stronger won, I think it’s a good idea to actively exchange dollars during such times.

I think this is somewhat like a bargain sale right now, so personally, I'm considering buying some dollars. It would be good to take a look at the other news as well. Currently, there is an event on Naver Premium Content where if you subscribe for a month, you automatically receive a 50% discount coupon. This event is being held to celebrate the Chuseok holiday, and I've set it up for a generous 1,000 people. Although it's unlikely that all 1,000 will come, a few people will definitely show up. So, if you make a purchase, you'll automatically receive the 50% discount coupon. I hope you take an interest and support this. That's all for today. Thank you.

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