"This Year, Nationwide House Prices Expected to Fall 0.9%... Seoul Metropolitan Area Jeonse Prices Remain Unchanged"

Korea Appraisal Board Announces 2020 Housing Price Outlook

[Asia Economy Reporter Moon Jiwon] The Korea Appraisal Board (KAB) predicts that nationwide housing prices will decline by 0.9% this year.

On the 21st, the KAB Real Estate Research Institute announced the '2019 Real Estate Market Trends and 2020 Outlook' containing this forecast.

According to the announcement, nationwide housing sale prices are expected to fall by 0.9% this year. By region, the Seoul metropolitan area is projected to decrease by 0.8%, while other regions are expected to decline by 1.0%.

The Korea Appraisal Board explained, "Following the announcement of the December 16 measures, a slowdown in high-priced housing price movements is anticipated, and purchasing sentiment is expected to weaken due to loan regulations and strengthened property taxes."

Furthermore, it predicted, "Especially with the strengthened property tax, the burden level of property tax on high-priced houses over the next three years will be around 3-4% of the current market price, and price adjustments will occur after the second half of this year when the impact on net asset reduction becomes visible."

Nationwide jeonse (long-term lease) prices are forecasted to decline by 0.4% this year. However, the Seoul metropolitan area is expected to maintain a stable trend, with only other regions experiencing a 1.2% decrease, according to the Korea Appraisal Board.

The Korea Appraisal Board stated, "Although there is a concern that jeonse prices for newly built apartments may rise due to interest rate cuts, the rental market is expected to remain stable nationwide due to continuous supply signals such as the early promotion of the 3rd New Town development."

Housing sales transaction volume is projected to decrease by 0.7% compared to last year, reaching around 800,000 units, as purchasing sentiment in the high-priced housing market is significantly weakened by the government's ongoing real estate regulatory policies.

Research Director Kim Seongsik said, "Due to the December 16 measures, investment sentiment centered on the high-priced housing market has weakened, reducing the driving force supporting the previously rising housing prices. The jeonse market is also expected to remain stable due to the accumulated supply already provided."