As forecasts on this year's sale prices of dwellings diverge between real estate experts and licensed agents, market uncertainty is growing depending on policy variables such as tax changes and interest rate trends.
According to a report by KB Financial Group Management Research Institute on the 5th, in a survey on Apr. the 56% of market experts expected home prices to rise this year, while 54% of licensed agents projected a decline. At the start of the year, both sides predicted gains, but sentiment flipped as the possibility of tax hikes in the second half grew.
Last year, the dwellings market showed pronounced regional gaps. Nationwide sale prices of dwellings rose 1.0%, but the greater Seoul area climbed 7.4%, while the five major metropolitan cities fell 1.4% and other provinces fell 0.6%. Even within Seoul, some areas surged more than 20%, while others saw only slight increases or declines, deepening a "hyper-polarization" trend.
Transactions totaled 726,000 units, up 13.0% from a year earlier, and jeonse prices also rose 1.0%. In the lease market, the share of monthly rents expanded, indicating an ongoing shift in the housing cost structure.
Tax policy is cited as the reason behind the shift in outlook. Analysts said the planned end of the capital gains tax relief for multiple-home owners and the highlighted possibility of higher property taxes affected buying and selling sentiment.
Market participants commonly cited supply shortages and rising construction costs as drivers of higher home prices, while loan regulations and funding burdens were identified as factors for declines.
The institute projected that even if supply-demand imbalances persist due to reduced supply, the rise in mortgage loan lending rate and policy uncertainty will likely cap the pace of price gains. It stressed that, especially this year, government policy is more likely than ever to act as the key variable steering the market's direction.