20171106-三星证券-Presale_market_still_solid_5页_359kb

Real Estate Weekly Summary

Core Content Overview

This report provides a comprehensive analysis of the Korean real estate market, focusing on apartment prices, presales market performance, unsold housing inventory, transaction volumes, mortgage balances, and regulatory updates. It highlights the continued resilience of the market despite recent government interventions aimed at curbing speculation and stabilizing prices.

Main Points

1. Apartment Price Trends

• Seoul Reconstruction Prices: Continued to rise for the eighth consecutive week, increasing by 0.21% w-w.
• SMA Apartment Price Index: Rose to 107.6 as of October 30, showing a 0.04% m-m increase and a 0.22% y-y growth.
• Non-SMA Apartment Price Index: Increased slightly to 101.3, with a -0.03% m-m change and a -0.07% y-y decline.
• Apartment Purchase Price: Nationwide at KRW 333,000/m², with SMA at KRW 422,000/m² and Non-SMA at KRW 226,000/m².

2. Presales Market

• The presales market remains strong, particularly in the Seoul Metropolitan Area (SMA).
• All key projects in SMA were overbooked on their opening dates, indicating strong demand for well-located new units.
• r114.com predicts an additional 100,000 presales units this year, emphasizing the importance of monitoring key areas and projects.

3. Unsold Housing Inventory

• Nationwide unsold housing units increased by 2.4% m-m to 54,420 units at the end of September.
• SMA saw a 6.1% m-m increase, while provinces experienced a 1.6% m-m rise.
• Gyeonggi Province and Incheon showed the highest increases, with 349 and 210 more units, respectively.
• Completed unsold units rose only 0.4% m-m to 9,963 units.

4. Transaction Volumes

• Nationwide housing transactions declined by 12.7% m-m and 7.9% y-y in September.
• SMA transactions dropped by 19.40% m-m and 11.28% y-y, while Non-SMA transactions fell by 2.92% m-m and 3.56% y-y.

5. Mortgage Balance

• Mortgage balance increased by KRW 3.3 trillion to KRW 561 trillion as of September 30.
• The growth of mortgage balance outpaced the decline in housing transaction volume, indicating a shift in financing behavior.

6. Regulatory Environment

• A series of real estate regulations have been implemented to control speculation and stabilize the market:
  • Household Debt Measures (Aug 25, 2016): Reduced public land supply, lowered guarantee coverage, and limited public guarantees.
  • Stabilize Housing Market (Nov 3, 2016): Banned presales rights transfer, tightened subscription rules, and limited presales contracts per individual.
  • Mortgage-Screening Guidelines (Nov 25, 2016): Applied to collective loans and cooperative mortgages, requiring amortization with no grace period.
  • Aug 2, 2017 Measures: Designated overheated zones, banned resale of presale contracts, and tightened capital gains tax and loan regulations (LTV, DTI).

Key Projects in Presales Market (November)

Key Indicators Summary

Weekly Data

Monthly Data

Conclusion

Despite regulatory tightening, the presales market remains robust, especially in the SMA, with strong subscription rates and high demand for well-located properties. Seoul reconstruction prices have continued to rise for eight consecutive weeks, showing resilience in the face of government measures. However, transaction volumes have declined significantly, and mortgage balances have increased, suggesting a shift in buyer behavior and financing trends. The government's housing welfare roadmap is expected to influence future market dynamics. Investors are advised to remain cautious and monitor key areas and projects closely.