[Yoon Seok-yeol Impeachment] "Uncertainty Resolution vs Policy Vacuum Concerns"... What is the Direction of the Real Estate Market?

"Policy Direction May Become Clearer with Regime Change... Entry Timing for Non-Homeowners"
Short-Term Shock Pointed Out... "Concerns Over Policy Confusion for 3rd New Towns"
"Focus on Real Variables Like Supply and Interest Rates... Political Issues Are Temporary Shocks"

The real estate market is stirring following the political uncertainty lifted by the impeachment of President Yoon Suk-yeol. Political upheavals such as regime changes or presidential impeachments in the past have had a profound impact on the real estate market. During the impeachment of former President Park Geun-hye in 2017, apartment prices in Seoul rose by more than 1.4% within six months after the ruling, driven by market expectations of a regime change. Experts generally warned of the possibility of 'short-term turmoil' but analyzed that expectations arising from the resolution of political uncertainty would take root in the market. They also agreed that attention should be paid to non-political real variables such as interest rates, supply and demand, and the economy.

Yonhap News

On the 4th, experts including Ko Jong-wan, Director of the Korea Asset Management Research Institute, Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, Yang Ji-young, Senior Asset Management Consultant at Shinhan Investment Corp., and Jang Jae-hyun, Head of Research at Realtoday, shared their outlook on the real estate market following the impeachment result.

Political Stability in the Mid to Long Term... "Timing for Non-Homeowners to Enter"

Committee member Park Won-gap said, "Although uncertainty about the regime change remains, it is a timing when real demand buyers can move again," adding, "There is a possibility that non-homeowners or those considering switching homes will partially re-enter the market." Director Ko Jong-wan also said, "While the impeachment ruling may seem negative for the market at first glance, in the long run, political stability and clearer policy directions can be expected," and added, "The government's supply stance and institutional reforms can maintain consistency, positively influencing buyer sentiment."

On the other hand, some pointed out that short-term shocks are inevitable. Senior consultant Yang Ji-young said, "The market will temporarily shift to a wait-and-see stance, and concerns about policy gaps that arise during regime changes will resurface," adding, "Especially, public-led supply policies and the development of the 3rd New Towns may experience considerable confusion." Head Jang Jae-hyun also said, "If the entities responsible for policy formulation and execution are in a vacuum, uncertainty may not be resolved but rather increase," and added, "The market is likely to react sensitively to the unprecedented situation of a presidential change."

“Interest Rates and Supply Are More Important Than Politics"

However, regardless of the impeachment result, there was general agreement that the direction of the mid- to long-term real estate market will ultimately be influenced by real economic variables such as interest rates and the economy. Shin Dae-hyun, a researcher at Kiwoom Securities, analyzed, "Political events are only temporary shocks; the essential drivers of market recovery are falling interest rates and supply gaps," adding, "Real demand buyers should focus on the structural flow of the market rather than policy events." Committee member Park Won-gap also said, "Political issues are short-term psychological variables, and actual price trends depend on interest rates and economic recovery," adding, "If the Bank of Korea lowers the base interest rate in the second half of the year, the housing market can also gain momentum."

Director Ko Jong-wan forecasted, "Seoul still has a low volume of new housing supply, and demand recovery has begun," adding, "A market centered on real demand will maintain a certain level of resilience." Senior consultant Yang Ji-young said, "Real variables such as the rebound in jeonse prices and the recovery of the pre-sale market are working in combination," adding, "The market is influenced more by buyers' reactions than politics." Head Jang Jae-hyun predicted, "When the full-scale pre-sale season begins after June, the market atmosphere may change again, especially in popular areas with limited supply."