Hello, I'm SBS reporter Son Seung-wook. We summarized the contents of part 2 of the SBS Economic Freedom Salon talk concert held in Yeonnam Chang, Seoul. Real estate outlook for 2023. Kim Ki-won, CEO of Richgo, and Kim Hyo-sun, Senior Research Fellow at NH Nonghyup Bank, were present.


Finding the floor?... Kim Kiwon Richgo CEO


(15) House prices, 30~2% should fall further to be appropriate.

Whenever CEO Kim Kiwon Richgo always appeared at the SBS Economic Freedom Salon, he started talking with statistics based on big data. It was the same with this talk concert.

The first table below is titled 'Apartment Bubble Index relative to M2 Call Volume', which simply shows how overvalued house prices are relative to the money on the market. The second table is titled "Apartment Bubble Index as a Percentage of GDP," and it was created to see where apartment prices are in light of the size of our economy. Kim explained that it is a model modeled after the "Buffett index."


The most eye-catching part of these two tables is the 'potential downside' highlighted in yellow. Table 1, based on currency volume, suggests a "16~26% decline probability (as of January 23)," and Table 1, based on GDP, mentions "2~20% decline (as of April 30)."

It varies depending on the region, but after a 23~4% drop from the high, there is a possibility of further decline of 20~30% in the future.

"The data still says it's going to drop from at least 16 percent, up to 30 percent. Only when that level does the huge overvaluation, including the 'corona bubble,' fall to the average"


(15) The housing purchasing power index... "It's hard to expect a bottom for the time being" CEO Kim Ki-won said, "There are many important data, but if I had to pick one of the most important, it would be the

housing purchasing power index data." What is the exact definition of the Housing Purchasing Power Index? This is the explanation of Korea Real Estate Agency.

The Housing Affordability Index (HAI) refers to the ability of a household with a moderate income to pay the loan principal with its current income, assuming that they take out a loan from a financial institution to purchase a house at a median price.


Now let's look at the table presented by Representative Kim Ki-won. In the table below, the housing purchasing power index is a bar graph, and as shown in the middle left, the average is 49.3 (circled in blue). And as you can see from the yellow circle on the right below the table, it's now 30.1, the lowest since the 2000s.


Based on this data, CEO Kim Ki-won said, "There is no one who can take out a loan and buy a house now," explaining the current real estate market.

"It's a huge burden to be able to take out a loan now and buy a house in Seoul. Can you buy a house? There isn't. You can't buy a house. Despite the government's special housing loans and various stimulus policies, as you can see from this housing purchasing power index, there are no people who can take out loans to buy a house. We had a massive crash last year, but the old rise in house prices is still in the minds of a lot of people, the public. You might say, 'Isn't this and this (house price) going away?' It's jaw-dropping. The data will show everything in the future. Don't expect a bottom for the time being."


April trading volume... Hyosun Kim Senior Research Fellow, NH Nonghyup Bank


(1) Is it a floor? "Isn't there one basement floor left?"


Kim Hyo-sun, chief researcher at NH Nonghyup Bank, diagnosed the current housing price situation, saying, "In a case like Seoul, I think the floor is still about one basement floor."

As a basis, we focused on Kim's "house prices that continue to fall despite the government's deregulation policy." Examples include the government's January real estate measures and the Bank of Korea's interest rate freeze.

"Earlier this year, the government did CPR. The measures taken in January this year, that is actually the announcement of the work of the government and the work report of the Ministry of Land, Infrastructure, and Transport. We also froze interest rates twice. So this year, the decline is easing a little bit. But to put it another way, this is almost deregulated now to the level before the Moon Jae-in administration. Nevertheless, it is worth noting that it has not turned upward and continues to decline."

Kim also predicted that for these reasons, apartment prices in Seoul would drop once more. It could go down another notch to 2018 prices. The "first basement floor" remained.

Kim said, "Right now, Seoul's real trading prices have fallen to the level of 2019 to 2020. However, if you look at the trend of sales increases and decreases, there are more areas that are increasing. It seems that the trading volume continues to shrink a little bit. Now, the effect of the special shelter loan policy is being halved a little, so I think we should already take that into account."


(2) Will the volume decrease again in April?

The trading volume in January~March increased little by little. Regarding this increase in trading volume, 'Smoke boona?' There was also an article about it. Kim Hyo-sun predicted that trading volumes could decline again in April.

Kim said, "I think the government was expecting not only real demand but also investment demand to come into the market and increase transactions a little bit more, and to make the domestic economy a little better, but in fact, it is not easy for investment demand to come in now."

Regarding the increase in transaction volume in January ~ March, Chairman Kim analyzed that some of the "real consumers" centered on the younger generation are "now quite a lot away," but at that time, government support measures such as special housing loans came out, and transactions were carried out mainly on urgent sales, but most real consumers are still wait-and-see.

In particular, by region, Incheon and parts of Gyeonggi Province fell a lot last year, but he said that this year's occupancy volume may be even more. In particular, in conjunction with the recent increase in charter fraud victims, he said that it is necessary to be more cautious.

"In the case of Incheon, we have more than 300,000 tenants in one year this year. You may also remember the charter fraud controversy. If there are a lot of tenants, in fact, this should buffer the demand a little with the charter, but there is no demand for charters. Now that it is too much of an issue in Incheon, consumers are very reluctant. However, since there is a lot of charter volume, we believe that some areas in Incheon and Gyeonggi Province may also slump a little in the long term."

(The rest of the story is from the soup)