The housing market slows down in South Korea due to the increasing Seoul housing prices. However, the housing market in South Korea remains stable since the crisis in 2007. In recent years, foreigners invest in properties even though many people find the country challenging to navigate. Investment firms like Stratford Management Inc review real estate in Seoul to see if it’s a reliable market.
Real Estate in Seoul Korea from 2018
In 2018, the government put a brake on the housing market. The Bank of Korea or BOK increased the key interest rate from 1.5% to 1.75%. Also, the Financial Services Commission or FSC released a comprehensive set of mortgage regulations that applied to new mortgages loan applications from September 14, 2018.
Korea relies on the Chonsei system or key money deposits, along with government intervention, making a unique housing market. The curb housing prices have anti-speculative measures or overheated speculative zones, which include Gwacheon, Sejong City, and Seoul.
The results have been positive with unsold houses that have gone from 123,297 units in 2009 down to 57,330 housing units in 2017. Also, the banking system is favorable at 115.16 average bank loan-to-deposit in the third quarter of 2018. The house price index in Seoul increased by 6.2% in December 2018.
Based on the statistical report of the Korean Statistical Information Service or KOSIS, the national housing purchase price index increased by 1.1%. However, the final score is that the house prices decreased by 0.2% due to inflation. Companies like Stratford Management Inc review real estate in Korea and are optimistic about the results.
Real Estate in 2019
The second most significant house price increase was Gwangju, which lands 3.9 percent from December 2018 until 2019. Daegu has a 3.6 percent house price increase, followed by Daejeon at 2.5 percent, and Incheon at 0.7 percent. Firms like Stratford Management Inc review real estate across the country.
The seventh-largest city in South Korea is Ulsan, with the sharpest house price decline 6.9 percent and 1.5 percent drop in Busan. Jeonnam, out of the nine provinces n the country, had the highest price increase at 2.9 percent, followed by Gyeonggi at 1.9 percent, and Jeju at one percent. Gyeongnam province had the lowest price decline at 4.8 percent, followed by Chungbuk at negative 2.5 percent, Gyeongbuk at negative 1.9 percent, Chungnam at negative 1.8 percent, Gangwon at negative 1.6 percent, and Jeonbuk at negative -0.01 percent.
Seoul Real Estate 2020
Because of the supply gap in Seoul, it drives up property prices. That’s why the central government wants to build 300,000 houses in Seoul by 2020. The Ministry of Land, Infrastructure, and Transport or MOLIT says that over-supply is the major problem in the provinces. Property buyers were previously encouraged to invest by the crucial low rate of the Bank of Korea, which increased the country’s household debt by around 6.7 percent or KRW 1,514 trillion or $1.35 trillion in the third quarter in 2018, according to the Bank of Korea (BOK).
About the Author
