Market was up this year and 2015 will be betterIt was not a bad year for real estate, analysts say, and next year may be even better.
The property market was in the hands of the government this year. Thanks to its efforts, including various deregulatory moves, the market is slowly emerging from the severe recession that began in 2008.
The residential real estate market showed relatively sound growth this year, particularly in Seoul and nearby areas.
Across the nation, total apartment transactions were 644,000 as of November, the largest since 2006 when the market was at its peak, according to data by the Ministry of Land, Infrastructure and Transport. Predicting that about 64,000 transactions will be made in December, the total should exceed 700,000.
In Seoul and other metropolitan areas, the total is expected to surpass 300,000, the highest since 2006.
The price of apartments in Seoul and surrounding areas rose 2.36 percent as of November, according to data by the Korea Appraisal Board. The rise is also the highest since 2008.
“There were some ups and downs, but compared to last year, this year has been a good start for a recovery,” said Kim Se-ki, a manager at Korea Appraisal Board.
Due to a set of deregulations for the housing market, the number of newly built apartments reached a new high, recovering to the level before the 2008 global financial crisis. According to Real Estate 114, there were a total of 280,000 new apartments put on the market this year. As of October, the competition ratio to get a new apartment at a lower price through the pre-subscription system was 5.9 to one. That means there was a high demand for new apartments.
Analysts agree with the forecast that the market will be more lively next year. The Korea Housing Association and other research organizations released positive reports for the market in 2015.
As a significant number of new apartments will come onto the market next year, there will be higher demand for people changing residences.
But very high jeonse rates, or long-term deposits, are expected to continues as owners switch their properties over to monthly rental contracts.
“That could help sale transactions rise because as jeonse prices keep going up, consumers might consider buying especially in a low interest rate environment,” said a researcher at the Korea Housing Association.
BY AHN JANG-WON [firstname.lastname@example.org]
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