The results of a study showed that apartment prices in the Jeju area bubbled by more than 20%.
The Korea Economic Research Institute (hereinfollowing referred to as the Hankyung-yeon) announced on the 23rd that the housing price bubble has reached an excessive level nationwide as housing prices have risen by more than 4.6% on average annually over the past five years through the results of the ‘Housing Price Bubble Controversy and Evaluation’ announced on the 23rd.
According to data from the Real Estate Agency for the past five years, from July 2018 to July 2022, house prices rose 23% nationwide, recording an unprecedented steep rise.
Although the housing price seems to be going down due to the sudden sale transaction that traded below the market price this year, it is difficult to judge that the housing price has changed to a downward trend in a situation where the transaction volume has sharply decreased due to the effect of a rise in interest rates.
In particular, the Hankyungyeon analyzed that the bubble level in the metropolitan area was extreme. It is argued that there is an excessive bubble in the price, as Seoul is overvalued by more than 38% of the current market price and Gyeonggi by more than 58%. It was analyzed that the bubble level in the Gangnam-southeast region, known as the wealthy, exceeded 40%.
On the other hand, it was found that there was an average price bubble of 19.7% in the provinces. Although it does not reach the bubble level in metropolitan areas such as Seoul, there is a suggestion that normalization is urgent due to uncertainty in the housing market.
The housing price bubble ratio in Jeju was 21%. This was lower than that of metropolitan cities such as Busan (31%), Daejeon (28%), Gwangju (39%), and Daegu (23%), but was lower than that of Chungbuk (15%), Gangwon (14%), Jeonnam (16%), and Jeonbuk (16%). 8%), Gyeongnam (9%), and North Gyeongsang (2%).
Lee Seung-seok, Associate Research Fellow at the Korea Economic Research Institute, said, “It is true that there has been a bubble of regarding 10 to 15% on average in the housing market price due to the high population density of Korea compared to the national land, but the current housing price bubble is excessive.” In light of policy cases and analysis results, the signal on housing supply should be clearly communicated to consumers.”
