Trends and Prospects of Home Sales Price, Jeonse Price and Jeonse Price Rate: Focused on Seoul, Busan, Daegu, Gwangju, Daejeon
Authors:   Asia-Europe Perspective Association, Choi Jeong Il , Lee Ok Dong 
Published: December 2024

Recently the real estate market has been stabilizing, there is a reverse jeonse crisis phenomenon. In June 2016, when the gap investment was on the rise, the jeonse price rate in Seoul dropped from 75.1% to 65.4% in June 2018. With the increase in the number of new apartment units in Seoul and metropolitan area, there is a reverse jeonse crisis. The decline in the jeonse price rate of Seoul apartments is spreading to Gangbuk after the Gangnam three districts. The increase in the financial burden of landlords and the regulation of additional loans may increase the volume of sales.
On September 13, 2018, the government announced the 913 real estate policy. Comprehensive real estate tax is a tax levied on a person who owns real estate on June 1 every year. The taxation was added to the person who has more than two houses in the adjustment area. The tax rate rose by 0.1 to 1.2 percent. Also, the tax rate was raised by 0.2～0.7% for houses with market value of over 1.8 billion won. In conclusion, tax was imposed on high-priced real estate, more than three houses, and two households in the adjustment area. The taxes raised by the increase in the comprehensive real estate tax will be used as financial resources for ordinary citizens.
Due to the rise in loan rates and the regulation of lending, transactions in the housing market are decreasing. The Bank of Korea plans to raise interest rates by the end of 2018. A rise in interest rates is likely to reduce housing demand. House prices and charter prices are expected to decline gradually. The rise in interest rates will lower the ability to buy housing because of interest payments. 913 Comprehensive real estate measures are expected to gradually stabilize the overheated housing market.
The purpose of this study is to examine the trends of apartment trade price, jeonse price and jeonse price rate, and to predict future directions. For this, Korea, Seoul, Busan, Daegu, Gwangju and Daejeon were selected and analyzed by using 389 monthly data from January 1986 to May 2018.
Since 1986, the trade prices rise in order to high Seoul, Busan, Daegu, Daejeon, Gwangju, and the volatility rise in order to large Daegu, Seoul, Gwangju, Busan, Daejeon. Jeonse prices rise in order to high Seoul, Daegu, Daejeon, Busan, Gwangju and the volatility was in order to large Seoul, Daejeon, Daegu, Busan, and Gwangju. From the change ratio of the trade price and the jeonse price, it was in order to high Seoul Daejeon Busan Daegu Gwangju. Since 2010, the change ratio has been converging for less than 1%. In the growth rate distribution, the trade price is usually between -1% and + 2%, and the jeonse price is between -2% and + 3%, which is twice as wide as the trade price.
In the ACF, it presented that the current state of each city is not closely related to the past & future. Therefore, it is judged that it is not independent according to the passage of time, which means that time series data have ACF. In the Q-Q charts of the trade prices and the jeonse prices, each city is moving up and down very flexibly around the baseline. Also, there are a lot of abnormal phenomena (⚪) due to abnormality in top and bottom. In the missing value analysis of the trade prices and the jeonse prices, Seoul, Busan and Daegu have high mean and standard deviation. But Gwangju and Daejeon have relatively low mean and standard deviation.
In each city’s trade price and the jeonse price trend, since 1986 the jeonse price has risen more than the trade price. So the rate of the jeonse price has increased. However, after the jeonse price rate declines slightly after 75% in 2016 and 2017, there has been a crisis due to gap investment. For the time being, the jeonse prices will slow down and the change rate will be negative (-). The jeonse price rate is expected to decline further. This phenomenon is expected to be larger in Seoul.