Experts forecast recovery in real estate market this year

Asked when the right time to buy a house is, 86.7 percent of economic experts answered "from now to the end of this year." Experts forecast that the real estate prices would go up next year gaining momentum from the recent recovery in the market after hitting the bottom.

On Thursday, Dong-A Ilbo reporting team conducted a survey on the housing market forecast with 30 experts, including real estate and investment experts, head of research center at a stock exchange firm and economists. Among the surveyed experts, 86.7 percent (26) forecast that house prices would go up next year.

Regarding the increase rate, more than half of respondents (56.7 percent) said 3~5 percent increase from the current market prices. No one predicted house prices would go down. Among the respondents who answered house prices would increase, 30.0 percent said, "This is the right time for rebound since real estate prices had sharply dropped for the past several years."

Experts evaluated strong demands for application for to-be-built apartment in the Seoul metropolitan area, which has increased since the "Sept. 1 Real Estate Policy," would bring about positive momentum to the market. "Wirye Xi" apartment in Wirye new town received purchase applications from the primary and secondary subscribers on Wednesday. The average competition rate was 139:1, the highest rate among newly built apartments in the Seoul metropolitan area since 2006. Most of experts forecast that the entire real estate market would recover as such heated demands in the apartment purchase application would spread not only to Gangnam areas in Seoul and Wirye new town that are about to receive applications within this year, but also to other adjacent regions.

Some 76.6 percent of the experts chose "Gangnam three districts (Gangnam, Seocho and Songpa)" as the region to show the biggest increase in house prices. Fides Development CEO Kim Seung-bae said, “House prices in the Gyeongbu line, which connects Gangnam, Bundang, Pangyo, Gwanggyo and Dongtan, will increase by more than 10 percent.”

While forecasting recovery in the housing market next year, 36.6 percent of the experts warned "house poor" issue may reoccur due to decrease in house prices in the mid and long term. Experts pointed out sluggish demand for housing due to population decrease and high unemployment rate, growing household debts, and global financial market risk as potential risk in the property market.

This survey was conducted based on Delphi technique, which asks questions to 30 experts and collects opinions regarding the result from the respondents.