Real Estate Market Outlook for July 2024: Increased Volatility Expected

 

Real Estate Market Outlook for July 2024: Increased Volatility Expected

The real estate market in Korea experienced a temporary recovery in the first half of 2024 due to the government's 1.3 real estate measures and the special loan on jeonse (key money) deposits. However, the market has regained its sluggishness due to factors such as interest rate hikes and heightened economic uncertainty. The real estate market is expected to become even more volatile in July, continuing the trend seen in the first half of the year.

1. Key Variables

1.1 Interest Rates

Interest rates are one of the most influential factors affecting the real estate market. In July 2024, a further interest rate hike by the US Federal Reserve is highly likely, putting downward pressure on the real estate market. However, considering concerns about a domestic economic downturn and the possibility of adjusting the pace of interest rate hikes, a more moderate rate increase than expected may occur.

1.2 Economic Conditions

Concerns about a global economic downturn are growing in the second half of 2024. An economic downturn in major countries could negatively impact the real estate market through factors such as reduced domestic exports and investment contraction. However, the severity of the economic downturn is expected to be limited considering the government's active fiscal policies and the possibility of a recovery in the domestic consumer market.

1.3 Government Policies

The government is implementing various policies to stabilize the real estate market. In July 2024, policies such as expanding housing supply and strengthening regulations on real estate speculation are expected to continue. The direction and intensity of government policies could have a significant impact on the real estate market.

2. Regional Outlook

2.1 Seoul Metropolitan Area

The real estate market in the Seoul Metropolitan Area is expected to show a downward trend due to factors such as interest rate hikes and heightened economic uncertainty. In particular, apartment transactions are expected to decrease due to a contraction in investment purchases, putting downward pressure on apartment prices. However, Seoul is expected to maintain a relatively stable market trend due to structural factors such as population influx and housing shortage.

2.2 Local Areas

The real estate market in local areas is expected to show different trends depending on the region. Areas facing difficulties due to population decline and industrial萎缩 are highly likely to experience further declines in real estate prices. On the other hand, areas with positive factors such as population influx and new industry attraction have the potential for real estate price increases.

3. Jeonse and Monthly Rent Market

The jeonse and monthly rent market is expected to continue its upward trend in prices due to increased demand for rental housing and a shortage of supply. In particular, the increase in jeonse and monthly rent prices in the Seoul Metropolitan Area is expected to be even greater. However, the upward trend may be somewhat limited due to the government's strengthened policies to stabilize the jeonse and monthly rent market.

4. Investment Strategies

The real estate market is expected to become more volatile in July 2024. Therefore, investment decisions should be made carefully. If the goal is to secure housing with a long-term perspective, considering purchasing during a downward trend may be an option. However, short-term investments are highly risky and should be avoided. It is important to carefully analyze the market conditions in each region, consider one's own financial situation, and make investment decisions prudently.

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