(Financial World) Global property market changes under the epidemic: South Korean housing prices soaring, Manhattan apartments are cold
China News Service, Beijing, August 27 (Reporter Pang Wuji) Under the influence of the new crown pneumonia epidemic, there have been many unexpected new changes in the global real estate market. Under the gloom of the epidemic, most industries have suffered a huge impact. It is not uncommon for companies to go bankrupt and employee unemployment, but housing prices in many cities, especially international metropolises, have not fallen but have risen.
House prices in Seoul, South Korea soar
Recently, there has been a wave of price hikes in Seoul, South Korea. According to a report issued by a social organization quoted by Yonhap News Agency, in May this year, the price of apartments in Seoul, South Korea jumped from 840 million won in May 2017 to 1.29 billion won, an average increase of 450 million won (about 375,000 US dollars), an increase of as much as 53%, the highest in the past 30 years.
The sharp rise in housing prices was accompanied by a large-scale increase in transactions. According to data released by South Korean officials recently, in July, the transaction volume of South Korean real estate reached 141,000, a substantial increase of 110% over the same period last year. From January to July this year, the cumulative transaction volume reached 762,000 sets, which nearly doubled compared with the same period last year. Both the monthly transaction volume and the cumulative transaction volume hit the highest level since statistics.
In fact, in the past three years, the South Korean government has promulgated more than 20 new housing policies to curb the overheating of the housing market, but the effect is not obvious. In an interview with a reporter from China News Agency, Lee Jin-woo, an agent of Kingdom Inc. in Seoul, South Korea, listed on Juwai.com, said that he has indeed felt the panic buying boom in Seoul recently. In South Korea, rich people want to buy a house in Seoul. The Seoul property market is the same as some central cities in China. The real estate market has been in short supply for a long time. In addition, the direction of the Korean government's housing supply policy is not adapted to the market, resulting in an increasingly prominent contradiction between supply and demand.
Generally speaking, in developed countries where the urbanization process has basically ended, the real estate market will gradually stabilize. If there is no severe external stimulus, it is difficult for housing prices to rise and fall rapidly. But South Korea does not seem to conform to this rule. Especially after the epidemic, there was a panic buying wave in Seoul, South Korea, and house prices rose significantly.
Global excess liquidity is seen as an important reason for the increase in housing prices in many countries, including South Korea. Since the COVID-19 pandemic, currencies in the world, especially in developed countries, have been released unprecedentedly. Interest rates in many countries have fallen to their lowest levels in history, and prices of various assets such as stocks, real estate and gold have generally risen.
A report released by the E-House Real Estate Research Institute shows that in the second quarter, the housing price index of 10 major cities in the world, including New York, Los Angeles, London, Tokyo, Seoul, Toronto, Singapore, Hong Kong, Beijing and Shanghai, "against the trend" for two consecutive quarters Up. Real estate properties in big cities, especially international metropolises, have become "safe havens" for funds.
New York Manhattan apartment cold
There are also some areas showing different trends. As one of the most prosperous and wealthy areas in the United States and even the world, the property market in Manhattan, New York has suffered a cold snap.
According to a report by New York real estate appraisal firm Miller Samuel and real estate agency giant Douglas Elliman, the number of signed contracts for co-ops and condominiums in Manhattan in July fell by about 57% compared to a year ago. The high-end market has been hit particularly hard, with co-op apartments priced between US$4 million and US$10 million falling by more than 75%.
Amy Wang is the residential sales agent of Brown Harris Stevens, a well-known high-end real estate company in New York. In an interview with a reporter from China News Agency, Amy Wang said that under the influence of the epidemic, the Manhattan residential market did show obvious signs of sales decline. From July 1 to August 24 last year, 1,879 residential units were sold in Manhattan, compared with 860 in the same period this year, a decrease of about 54%. Apartment prices also dropped significantly. However, not many homeowners choose to sell at lower prices, and many homeowners are still waiting to see. The decline in the foreign population is regarded as the main reason for the cold in the Manhattan property market.
Compared with buying and selling, the housing leasing market has been hit more clearly. "The housing rental market is very weak. It is difficult for the migrant population on which the housing market was most dependent in the past to enter. Rents have dropped significantly. Many residential rentals have fallen by 25% or more," said Amy Wang .
Chinese buyers may have played an important role in this. Georg Chmiel, executive chairman of the board of directors of Juwai IQI, Asia's largest real estate technology group, told a reporter from China News Agency that the latest data show that Chinese buyers are still the largest group of foreign buyers in the US housing market. Juwai.com’s past years of Chinese buyers' US property market inquiries show that the main places for Chinese buyers to buy houses in the United States are Los Angeles on the West Coast and New York on the East Coast.
In addition, the requirements for epidemic prevention and control and social distancing may also be important reasons for the short-term cold in the Manhattan property market. This is confirmed by a phenomenon: While the housing market in Manhattan is cooling down, the suburban housing market around New York ushered in a wave of rising prices. According to local media reports, residential sales doubled in July in Hampton, Westchester County, New York and other regions. Industry insiders pointed out that the new crown pneumonia epidemic has caused hundreds of thousands of wealthy New Yorkers to flee the city and head to the less densely populated suburbs, driving the rapid growth of real estate transactions in these places. (Finish)