If Bitcoin jumps, the price of apartments in Gangnam will also jump? Looking at the real estate professor's paper,

- Cryptocurrency and Gangnam apartment prices correlate, but the direct impact is well
- Apartment prices across the country remain flat for the first time in 22 weeks, Seoul apartment prices slow to rise
- Seoul apartment price index to fall for the first time this year 'loan regulation impact'
- Regardless of interest rate cuts, loan regulations continue, don't rush to 'buy my own house' at the end of the year?
- Real estate PF implementer's equity capital ratio up to 20% ↑ Small businesses

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: November 18, 2024 (Monday)
■ Dialogue: Kim Kyu-jung, real estate expert at Korea Investment & Securities Co., Ltd.

- Stepping Stone Loan to be partially implemented in Seoul + the Seoul metropolitan area from December 2nd, what are the checkpoints?
- Unlike Seocho Surrey Pool Greenbelt Release, Home Housing, Chonsei Refugee Possibility ↓
* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.

◆ Reporter Cho Tae-hyun (hereinafter Cho Tae-hyun): In the second part, we will look at real estate issues. Hot issue in hot area, <How about hot place? > It's time. Today, we will be joined by Kim Kyu-jung, a real estate expert at Korea Investment & Securities. Is the commissioner out? First, let's point out an interesting study result. Recently, cryptocurrency prices have been rising very rapidly. Higher prices of this cryptocurrency could affect apartment prices in Gangnam. There was a research result like this. How does this connect?

◇Kim Kyu-jung, a real estate expert at Korea Investment & Securities (hereinafter referred to as Kim Kyu-jung): Professor Dankook University analyzed these cryptocurrency virtual assets such as bitcoin, stock assets, and the price impact between other assets. Therefore, when stocks surged or prices such as cryptocurrencies such as Bitcoin soared, it also had a significant impact on the real estate market. In particular, apartments in 11 high-priced buildings in Gangnam-gu, Seoul, responded more sensitively to the surge in prices of other assets. The reason for this analysis is the possibility that the younger generation in their 20s and 30s who made money through virtual asset investments made high-priced real estate investments in Gangnam, and some of these transactions affected the overall sentiment, which slightly encouraged consumers. They analyzed it like this, "It played a role in increasing the volatility of the market as a whole." Of course, it is hard to say that the rise in cryptocurrency prices and real estate prices have a very direct impact, but the accompanying movement and correlation across the asset market, including virtual assets, has recently increased, so this can also affect other asset market volatility. You can understand this. As for the government, the overall influence of the asset market is growing, so it is necessary to establish a policy that encompasses the whole by considering the impact between markets and the price volatility of certain asset markets, which can have a significant negative impact on the real estate market. There is a thesis that you are making this suggestion. So it's interesting, and I think it'll help you take a look at it and understand the overall market afterwards.

◆ Cho Tae-hyun: That's fun. However, if you listen to what you said in general, it is safe to say that the degree of correlation has been confirmed and I am not sure about the causal relationship. Now, let's go into the real estate market and look at the price flow. It is said that the rise in apartment prices nationwide has stopped for the first time in 22 weeks. How was the price trend?

◇Kim Kyu-jung: Yes, the reason why apartment prices across the country have stopped rising is because the rise in apartment prices in Seoul is slowing down. Apartment prices in Seoul have been on the decline for four weeks now, according to the Korea Real Estate Agency trend. On top of that, the local apartment market is still on the decline, so it can be seen that the national average has stopped flat. In fact, if you look at the actual transaction price index of Seoul Apa released last week, the index was released in September, and it turned to a downward trend for the first time this year. The index fluctuation rate in September is minus 0.01%, which seems to be due to a slight decrease in transactions and some low-cost transactions, but as loan regulations continue, transactions are decreasing and price adjustments are predicted.

◆ Cho Tae-hyun: Does the actual transaction price index literally have to be understood as an index of the actual transaction price?

◇Kim Kyu-jung: Yes. After you actually trade, you report the price you traded within 30 days of the apartment. The index is created through this, so it reflects the transaction price a little more directly than the figures announced through the market price survey, but there is a time difference of about a month or two because it is based on the reported data. That's why it's November and the September index has been released. Since then, there have been continuous trading fluctuations in October and November, so you need to pay attention to the adjustment of the index.

◆ Cho Tae-hyun: I think there is also this effect because we have time to report. Overall, it seems that prices are slowing down or falling, but should we choose loan regulation as the biggest reason?

◇Kim Kyu-jung: That's right. Consumers who have become difficult to raise funds due to the reduction of the loan limit are having a little difficulty in trading, and interest rate volatility is also predicted later, leading to a wait-and-see atmosphere. That's why price adjustments are appearing as transactions are decreasing due to loan regulations. In fact, it seems that the transaction wait-and-see attitude began in earnest as the second phase of the stress DSR entered in September, and the stress DSR remains in three stages and is scheduled to be applied next year. So, it is predicted that these loan regulations will continue to be strengthened until next year, affecting the purchasing power of market consumers. On the other hand, the base rate is expected to go down now, so it can have the opposite effect. However, despite the cut in the base rate, the financial authorities are managing the balance of loans in conjunction with the cut in the base rate, which eventually leads to the management of the main interest rate through the additional rate, so even if the base rate goes down, my mortgage rate seems to have risen further. So, I think you should predict that loan regulations will continue to be strengthened and managed until next year, affecting consumers.

◆ Cho Tae-hyun: The Monetary Policy Committee is scheduled for next week, but regardless of this, those things that tighten lending rates will continue. You mentioned that there are also three levels of DSR. Then, should we continue to see this decline in transactions and slowdown in prices?

◇Kim Kyu-jung: In fact, the volume of transactions in Seoul's apartments has decreased rapidly, so you may be paying attention to it. The actual transaction volume of apartments in Seoul peaked at over 9,000 in July, falling to 6,400 in August, and is currently reported at 3,090 in September and 3,254 in October. As of November, there are still about a month and a half left to report, but transactions are rapidly decreasing to less than 485 cases and 500 cases. As such, it is judged that variables such as loan regulations and interest rate volatility predictions have been affecting consumers a lot recently. Since this decline is likely to continue in the future, changes in transaction volume can eventually affect changes in sales prices and things like this, so those who are considering investing should look at this situation and get help in determining the purchase timing and appropriate price.

◆ Cho Tae-hyun: Investors should leave it a little neglected for now. If I assume that I am an end user now thinking about whether to buy my own house or not after the lease is over, should I say that it is not the time to buy a house now, but to wait a little bit?

◇Kim Kyu-jung: In the short term, we believe that there is no need to hurry too much at the end of the year because transactions are rapidly volatile and there is a possibility of price adjustment due to loan regulations and interest rate volatility. However, when considering buying and selling after the lease contract is over, if you choose to lease a lease, you have to live for about two more years, and the purchase period is that long, so you should consider those variables. Not only the purchase of inventory housing, but also the sale of the 3rd new city is in full swing from next year, so whether to buy inventory housing or try a little subscription such as public sale, it is difficult to raise funds, so it is time to analyze whether to buy another lease on a deposit basis.

◆ Cho Tae-hyun: It's a time when loans are not easy, so it's better to review various things according to your personal financial situation and make a choice. Let's look at the next issue. There are many things that are the biggest detonator of the Korean economy, but we cannot leave out the issue of real estate project financing. It's said that the government went into a brain canal surgery. What was announced?

◇Kim Regulation: The main point of the announcement is to increase the stability of the business by increasing the equity capital ratio of the implementers. Currently, it is intended to increase the overall stability of the project by raising the equity capital ratio to 20% so that the project financing project can be carried out through land loans and PF at a equity capital ratio of only 3 to 5%. In fact, financial companies, banks, etc., are expected to increase their provisions if they lend to TF businesses with low equity capital ratio so that loans are implemented mainly in businesses with such stability and high equity capital ratio. For these, it includes systematically certifying specialized evaluation agencies and mandating business feasibility evaluation. There were also some major contents on the use of REITs, and one of the main points was to induce landowners to invest in REITs and to advance the market a little while increasing the overall equity capital ratio.

◆ Cho Tae-hyun: What is Ritz?

◇Kim Kyu-jung: First of all, you can think of it as an investment product that pays dividends with funds from real estate development or real estate management. In Korea, there are not many businesses that develop such project businesses through REITs or manage their assets and real estate assets. Compared to advanced countries, the size and number of cases are small, and the government has a basic direction to revitalize these REITs in the future, and the PF stabilization plan also includes participating landowners as shareholders of REITs to increase the equity capital ratio and increase business stability.

◆ Cho Tae-hyun: Okay. This real estate PF problem is a problem that is always repeated over a little period of time, and countermeasures have been taken every time. But I don't think there's much difference. Do you expect to see some effects this time?

◇Kim Kyu-jung: First of all, the construction industry welcomes the government's announcement that it will come up with measures to improve responsible completion practices and PF fees, which have been demanded so far, around next year. This time, as the ratio of equity capital in the content is increased, it becomes a little difficult for small implementers to enter, and the threshold is raised. And there are concerns that the sudden increase in the equity capital ratio could cause side effects such as the reduction of the size of small businesses, so the association and others agree on the stability direction of increasing the equity capital ratio, but they want it to be implemented step by step according to reality.

◆ Cho Tae-hyun: That's a very difficult question. Anyway, I hope this real estate PF problem will be solved well. We talked about it in the big picture. Let's go back to a story that can reach the end users once again. It is said that this stepping-stone loan regulation, which was a lot of talk and a lot of trouble, will be applied to the metropolitan area from next month. Then, how much will the loan limit be reduced when buying apartments in the metropolitan area?

◇Kim Kyu-jeong: You can see if you look at the changes, but as the limit is limited when you take out a stepping stone loan for apartments in the Seoul metropolitan area, it is essential to apply the semi-public system as much as the top repayment for small tenants. Currently, the top reimbursement is up to 55 million won in Seoul, so the limit can be reduced to up to 55 million won. Since there is up to 48 million won in top reimbursement right now, such as Yongin and Gimpo, such as the Seoul metropolitan area's overcrowded control zone, the amount of loans I can get may be reduced when such things are applied. In addition to that, the ban on value-added mortgage loans will now prohibit loans to new apartments that have not been registered before completion.

◆ Cho Tae-hyun: It will be implemented from December 1st. I think many people will be curious about whether it is possible to apply for a loan until December 1st and whether it is possible to borrow the balance when moving in in the first half of next year. If you're planning to move in, what should I check?

◇Kim Kyu-jeong: To be precise, if the recruitment announcement is made by December 1st and the start date of the move-in is within June 30th, 25th next year, an exception will be granted, so Fuji mortgage loans will be allowed for now. If so, the moving-in date can be very important that you won't be able to get a loan in advance before completion for the quantity you move in the second half of next year. Sometimes, there are people who ask what if they move in in the second half of the year due to delayed schedules, but this is applied based on the date of move-in in the notice. I think it will be a way to predict the loan by checking whether the moving-in start date is until June 30 next year in the notice.

◆ Cho Tae-hyun: So even if it's later than the notice, you're saying that if the notice is within that period, there may be no problem with this part, right? I see. This time, I'll end with "Hot People." The hot place that attracted attention this week is the green belt. I think it's Seocho Surrey Pool District, which has been attracting attention since the green belt was lifted. I heard that there have been a lot of inquiries about this part, but how was the situation?

◇Kim Kyu-jeong: In fact, I heard that there were a lot of calls about the land within the Earth or the apartments around the Earth. However, actual transactions such as nearby brokerage houses have already been price-adjusted, and it is not a situation where actual transactions and such things are exploding because there have been some predictions in advance. It is said that the prices of nearby apartments have been slightly raised.

◆ Cho Tae-hyun: There is a slight upward revision. But we've pointed it out once, but there are a few key points right now. There are many question marks about whether land compensation will be properly compensated or whether it will be possible to move in on time. Another thing to point out is the concern that there will be a chartered refugee. What do you think of this part, Commissioner?

◇Kim Kyu-jeong: First of all, the government has already lost a lot of green belt functions and there are not many things to compensate for, so we will proceed as soon as planned and proceed with the first move-in in 31st, but the site is still worried. The details of land compensation have been secured, but there are concerns that there will be difficulties in actually negotiating prices as various objects to be compensated are investigated. In the past, when the green belt was lifted when the residential house was built, more and more people were waiting for the lease on a deposit basis. In fact, this time, the amount of supply and targets are limited to newlyweds and young people, so it seems that more people are analyzing that these phenomena will not be significant. However, as there are some concerns that the amount of housing completed in Seoul will not continue to be sufficient in the next year, there are still concerns about such things as the price of lease on a deposit basis becoming more volatile and difficult to find a lease on a deposit basis at an appropriate price.

◆ Cho Tae-hyun: Okay. Issues in Various Real Estate Markets This week, I took a look with Kim Kyu-jung, a real estate expert at Korea Investment & Securities. Thank you for talking today.

◇Kim Kyu-jung: Thank you.