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Official land/home prices expected to drop in 14 years

Posted December. 15, 2022 08:08,   

Updated December. 16, 2022 15:21


Next year’s officially announced prices for detached houses and standard lots are expected to drop nearly six percent from this year’s. Such a drop in both types takes place for the first time since 2009. This is a result of the Yoon Suk Yeol administration’s decision to rationalize the posted price rate, aligning with that of 2020, which is also likely to lighten next year’s burden of holding tax for homeowners.

The Ministry of Land, Infrastructure and Transport announced on Wednesday that it was found that officially announced prices of detached homes next year would fall by 5.95% on the national average and 5.92% on standard lots. There are 250,000 units of standard detached houses, which will be the baseline for posted price calculation of 4.11 million detached houses nationwide. In the case of lot, 560,000 of the 35.02 million lots nationwide serve as samples.

It is the first time since 2009 (-1.98%) that officially announced prices of detached homes declined. The 13.29% drop from this year’s (7.34%) is the highest fluctuation rate on record. Such a change was majorly affected by ‘revision plan to rationalize posted price’ to alleviate the tax burden. The rationalization percentage for detached homes for next year will be 53.5%, returning to the 2020’s rate (53.6%) level. The rationalization rate for standard lots also fell to 65.4%, similar to two years ago (65.5%).

Experts say there could be a significant downward trend in the posted price of multi-unit dwellings, such as apartment homes. According to the statistics of the Korea Real Estate Board, from January to the first week of December (as of Dec. 5), apartment sales prices fell 5.22% nationwide. “As the real estate downturn continues and the decline in transactions continues, declining in the officially announced prices of apartment homes could be greater,” said Song In-ho, director of the Economic Information Center at the Korea Development Institute. Official prices of multi-unit dwellings are scheduled to be released in March next year.

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