The effect of ‘exclusion of medium and limited time for transfer tax’ is immediately visible… Supply-demand index ‘conversion to weakness’ as apartment sales in the metropolitan area increase
As the number of apartments for sale increased while the medium and temporary exclusion of capital gains tax for multiple houses was implemented from the 10th, the sales and demand index in the metropolitan area fell again.
According to the Korea Real Estate Agency on the 13th, this week (as of the 9th) the metropolitan area’s sales and demand index was 91.7, down 0.6 points from last week’s (92.3). If the buying/demanding index is lower than 100, it means that there are more people who want to sell houses than people who want to buy houses in the market.
While Seoul fell slightly to 91.0 from last week (91.1), buying sentiment in downtown areas such as Jongno and Jung-gu fell from 91.9 last week to 91.1 this week (-0.8P). Gyeonggi-do fell 0.8p from 92.4 last week to 91.6 this week, while Incheon fell 1.2p from 95.0 to 93.8.
According to the Real Estate Agency, apartment prices in the metropolitan area fell by 0.02 percent. Last week, it stopped the downward trend that had been going on for 13 weeks in a row and turned flat, but it turned downward again in one week. Apartment prices in Seoul, which had risen to 0.01% last week for the first time in 15 weeks, were flat again this week. In addition, apartment prices in Gyeonggi-do and Incheon, which turned flat last week, fell 0.03% and 0.04%, respectively, this week.
This appears to be the result of an increase in sales and a wait-and-see attitude due to an increase in US interest rates and a notice to exclude the transfer tax for multi-family homes for a limited time.
According to Asil, a real estate big data company, the number of apartments for sale in Seoul increased from 55,509 on the 9th to 58,442 as of the 12th, an increase of 2,933 (5.3%) in four days. Also, the number of apartments in Gyeonggi-do increased by 5.4% from 107,742 on the 9th to 113,517 on the 13th, and by 5.7% in Incheon from 24,046 to 25,409.
This is believed to be the effect of multi-homeowners seeking tax benefits, mainly disposing of apartments in the outskirts of Seoul and metropolitan areas. However, as demand in the housing market is not recovering due to the aftermath of interest rate hikes, it is not easy for the increase in properties to lead to actual transactions. It is highly likely that this will lead to a contraction in purchasing power for the time being.
The Jeonse supply and demand index for apartments in the metropolitan area was 95.5, the same level as last week. Seoul recorded the highest level this year at 94.7, the same as last week, and Gyeonggi-do rose slightly to 95.8 this week from 95.7 last week. In comparison, Incheon fell from 95.0 to 93.8. As the index has not yet exceeded 100, it is interpreted that there are relatively more Jeonse items than the demand for Jeonse in the market.
In fact, this week’s Jeonset price also showed no signs of unrest, with Seoul recording a flat for two weeks in a row, while Gyeonggi (-0.01%) and Incheon (-0.03%) continued to weaken. There are concerns about market instability in that Jeonse and monthly rentals are accumulating and the index continues to rise.
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