Real estate will likely remain the most attractive investment asset in South Korea as the country’s housing prices are expected to quickly rebound after a brief correction despite a slew of the government’s strict regulations to curb soaring housing prices.

According to a survey conducted by Maeil Business Newspaper on 50 real estate market experts from the academia, industry, and institutions about their forecast on the Korean real estate market after the government’s most powerful regulation of capping prices for new private apartments, 46 percent of respondents said housing prices in Seoul will still go up next year. Of the remaining 54 percent of respondents, 34 percent projected prices to hover at the currently level and only 20 percent forecast a fall in prices next year. The survey showed that respondents that projected housing prices to fall bet on a 3 percent to 5 percent decline, with none of them going for a fall of more than 5 percent.

The survey result indicates that house ownership in Seoul is still considered a safe asset, experts said.

A majority of real estate experts forecast a rise in housing prices in Korea despite the government’s introduction of a new measure earlier this month that places a price cap on newly built private apartments in Seoul and some cities in Gyeonggi Province to curb soaring housing prices. The latest and most powerful regulations came less than a year after the government announced strong property regulations in September last year.

According to Korea Appraisal Board, Seoul apartment prices gained 0.02 percent in the second week of August and similarly in the third week despite the government’s price cap announcement.

In the survey, 32 percent of the respondents also said that the housing market in Seoul has just entered a downward cycle, whereas 28 percent responded the downward cycle is near to an end, 16 percent at its peak, 12 percent early stages in an upward cycle, 8 percent latter-half of the upward cycle, and 4 percent at its lowest. The survey showed that 76 percent said the housing market will remain bearish in the rest of this year.

A majority of the respondents, however, expected that unlike in the past, a correction in housing prices will last only briefly and the prices will quickly rebound. More than 60 percent of them suggested to buy houses by the end of this year or 22 percent by early next year as an upward cycle in the housing market is forecast to begin next year.

In the survey, 60 percent of respondents said real estate investment is still an attractive investment option as to others such as stocks, indicating more liquidity to flow into the property market amid low-interest rate trend. Only 6 percent of the respondents were pessimistic about property investment.

By Park In-hye and Lee Eun-joo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]