2024-06-02 02:30:02
“Inhabitants decline promotes focus, and housing costs in concentrated areas haven’t any selection however to rise.”
Whereas the costs of main residences in upscale areas comparable to Gangnam, Seocho, and Yongsan-gu in Seoul have recovered to their earlier peaks, Nowon, Dobong, and Gangbuk-gu, which have been as soon as thought of sacred locations for the Yeongkkeul individuals, are exhibiting a downward development. There are each opinions available in the market that the actual property market has bottomed out and entered an upward development, and warnings {that a} main decline has begun in an period of inhabitants decline. Because the outlook for the actual property market diverges, the considerations of customers dreaming of proudly owning their very own residence are rising. Actual property knowledgeable Cho Younger-gwang says, “Customers ought to take note of ‘inhabitants density’ and ‘family developments’ that decide future housing costs,” and argues, “In an period of inhabitants decline, housing costs in areas with excessive inhabitants density are sure to rise.” I not too long ago met Mr. Cho, who revealed ‘The Peak of Wealth Created by Large Knowledge’, which accommodates actual property funding methods, and heard about ‘methods for creating wealth via actual property’ in an period of inhabitants decline.
Take note of areas with excessive inhabitants
What market indicators ought to I take note of to know the place home costs will rise?
“In a market as unstable because it has been not too long ago, we have to give attention to demand circulate reasonably than cycles. “The info that tells us which course actual property demand will transfer is inhabitants density and family developments.”
Why ought to we give attention to inhabitants density?
“It’s because we’re in an period of inhabitants decline. Younger individuals residing in depopulated areas the place not solely faculties and industrial areas but additionally jobs are reducing have a higher want to reside in overcrowded areas. Due to this fact, demand for actual property will increase in areas with excessive inhabitants density. Which means that the upward development in actual property costs in areas with excessive inhabitants density is a predetermined future.”
What are the traits of areas the place inhabitants is concentrated?
“It seems that areas the place the inhabitants is concentrated have a big space occupied by semi-industrial or industrial areas. It wasn’t simply crowded with residences like in Gangbuk. In actual fact, Mullae-dong in Yeongdeungpo-gu, Seoul, and Seongsu-dong in Seongdong-gu, that are not too long ago present process a hip transformation, are additionally semi-industrial areas.”
At present densely populated areas.
“Whereas the nationwide common inhabitants density is within the low 500s, the typical inhabitants density in Seoul is 15,000. Amongst them, Yangcheon-gu and Dongdaemun-gu are competing for first and second place. “This space has the next inhabitants density than Gangnam-gu or Seocho-gu.”
Why is that so?
“The ‘exceedingly excessive’ housing costs in Gangnam-gu and Seocho-gu create a barrier that forestalls additional inflow of individuals. That is per areas the place the highest 10% of earnings earners are concentrated. When individuals with excessive incomes flock like this, housing costs rise and inhabitants density additionally will increase however then declines. For that reason, the present inhabitants density in upper-class areas comparable to Gangnam-gu, Seocho-gu, and Hannam-dong is round 10,000 individuals.”
There may be additionally an opinion that “home costs are falling as a result of inhabitants decline.”
“One of many causes I wrote the guide was due to such ridiculous opinions. Home costs reply sensitively to inhabitants adjustments. Particularly, inhabitants decline promotes focus, and housing costs in concentrated areas are sure to rise.”
There may be additionally an opinion that the rise in ‘single-person households’ will result in a decline in housing costs.
“Do single-person households actually make up greater than half of all households? In keeping with a survey by Statistics Korea, the share of households with 2 to three individuals is predicted to be 53% by 2050, which is increased than the 40% share of single-person households. Due to this fact, the demand for small and medium-sized residences of 25 to 34 pyeong, the place many 2 to 3-person households reside, is sure to stay a lot stronger than for officetels.”
So, ought to we take note of residences of 25 to 34 pyeong?
“Nonetheless, it needs to be famous that the standard of housing in Korea is catching up with developed nations and the per capita residential space is growing. Particularly, after we investigated the Yangcheon, Nowon-gu, and Pyeongchon areas in Gyeonggi-do, that are college districts, we discovered that the proportion of residents residing in 39-pyeong items was comparatively excessive in comparison with different areas. College districts aren’t solely extra more likely to be populated by high-income households, but additionally by households with youngsters. The development for these college districts is already 35 to 39 pyeong, exceeding the nationwide common. If you’re focused on a faculty district, 35 to 39 pyeong appears to be like promising. Nonetheless, this equilibrium will not be in a lot provide.”
Buy of MZ era in undervalued Seongdong and Yeongdeungpo ↑
Will Gangnam’s undefeated streak be maintained?
“Gangnam is irreplaceable. To any extent further, the struggle alongside the Han River begins. Apgujeong, with over 10,000 households, is scheduled to take over the struggle alongside the Han River between Gangnam-gu and Seocho-gu that began in Banpo round 2030.”
Areas of notice aside from Gangnam are:
“It’s a ‘vibrant place’ the place energetic seniors and single-person high-income households flock. Particularly, locations with vitality are uncommon in an growing old society. It’s a place the place the group is developed and there are a lot of cultural amenities comparable to cafes and pop outlets. As well as, as giant supermarkets have closed one after one other after the COVID-19 pandemic, surviving giant supermarkets are additionally attracting consideration. These are highly effective alerts that would result in a vibrant place going ahead. Due to this fact, demand for actual property is sure to be excessive.”
Will there be a possibility to make wealth via actual property regardless of numerous rules?
“In March of this 12 months, precise transactions exceeded 40,000 for the primary time in two years, making precise transactions a significant information. Amongst them, the areas in Seoul the place individuals of their 20s and 30s made probably the most purchases within the first quarter have been Seongdong, Yeongdeungpo, Seongbuk, and Gangseo-gu. In these areas, the precise transaction proportion of individuals of their 20s and 30s was calculated to be round 40%. These of their 20s and 30s appear to have paid consideration to the Seongsu Strategic Growth Space in Seongdong-gu, Yeouido in Yeongdeungpo-gu, Jangwi New City and Kwangwoon College Station space growth in Seongbuk-gu, and Banghwa New City in Gangseo-gu. They determined that this space was undervalued and determined to buy it. “When you take note of undervalued areas the place focus seems, you’ll possible be capable of make some huge cash.”
There are additionally opinions that actual property will decline additional.
“Actual property pessimists argue that present home costs are too excessive. Nonetheless, the present scenario is totally different from the 2008 international monetary disaster. On the time, Banpo Raemian Firstige was unsold and home costs plummeted, however now Raemian Firstige is sustaining its worth within the 3 billion received vary even after the COVID-19 incident, Moon Jae-in authorities rules, and excessive rates of interest. In actual property, the ceiling worth is essential, and the costs of ceiling complexes comparable to Gangnam and Seocho-gu are at the moment very stable. As well as, the economic system is robust sufficient to not decrease rates of interest in both the U.S. or Korea. “I feel there may be little likelihood that the actual property market will decline additional.”
The proportion of households receiving mortgage loans within the 3% vary will increase
There are lots of homeless individuals who plan to purchase a home when the mortgage rate of interest falls to the two% degree.
“It appears tough for rates of interest to go down simply as a result of geopolitical variables. Will there really be an period of peace the place the USA, China, and Russia cooperate with one another like previously? In any other case, it’s tough to anticipate rates of interest within the 2% vary like previously. In actual fact, in accordance with a survey by the Financial institution of Korea, the variety of households receiving mortgage loans with an annual curiosity of three.5-4% was the best in two years in March, when precise transactions have been the newest. That is proof that folks consider that it will likely be tough for rates of interest to fall to the two% vary and are beginning to buy properties within the late 3% vary. What’s extra essential than anything is time. In keeping with a survey by the Ministry of Land, Infrastructure and Transport, the typical age of buying a house for the primary time is 40. To maintain up with the typical, you must personal your personal residence by the age of 40. “When you miss this era, the ‘oops’ second will solely shorten your earnings interval.”
So, what technique is finest for buying my own residence?
“In keeping with a survey by the Financial institution of Korea, the era that suffers most from excessive inflation is these of their 30s who’re renting a house. The issue is that jeonse costs are at the moment rising, and excessive inflation is predicted to stay in the interim. As well as, gross sales costs proceed to rise as a result of skyrocketing building prices. Due to this fact, now could be the time to decide. In actual property, as soon as demand is robust, it continues on that monitor although there could also be ups and downs. In keeping with numerous indicators, demand has already begun to collect steam. “If you’re a client dreaming of buying your personal residence, the ‘observe technique’ is advantageous in actual property, so following those that have made proactive strikes can also be an possibility.”
*When you search and observe ‘Journal Jin Donga’ and ‘Two Avengers’ on YouTube and portal websites respectively, yow will discover a wide range of funding data comparable to movies along with articles.
Weekly Donga Reporter Han Yeo-jin [email protected]
2024-06-02 02:30:02