<Anchor> It
is a friendly economy time.
Today (19th), I will be with reporter Kwon Ae-ri.
I heard that the result of calculating how much the specific impact of interest rates on house prices has come out?
<Reporter>
Yes.
Since our interest rates have risen a lot in a short period of time, it is still difficult to see that everything has been reflected in house prices.
However, it seems to go up a bit more.
So, looking at the relationship between our real estate and interest rate changes in the past will be a reference for forecasting house prices in the future.
The Institute of Finance looked at house prices based on apartments from 2008, when the financial crisis hit, to the first half of this year.
But it's not just interest rates that affect house prices.
Income and price There are many variables.
I calculated it by excluding variables other than interest rates as much as possible.
Then, it was found that when interest rates rise by 1 percentage point, house prices fall by about 4.57 percentage points, which takes about two years.
If interest rates rise today, that means that the impact will extend to about December at the end of the next year.
<Anchor>
So, even if interest rates rise, it does not immediately reflect in the market, it will take some time.
It takes time and is reflected slowly.
It's like this.
By the way, I heard that it was analyzed like this because the effect of interest rates on the real estate market has increased recently?
<Reporter>
Yes.
If we isolate 2018 and beyond, the effect of interest rates has been greater over the past five years.
When interest rates rise by 1 percentage point, house prices drop by more than 5 percentage points over two years.
Why has the effect of interest rates on the real estate market over the past five years been greater than in the past? This is an area that requires more precise analysis in the future.
Anyway, let's make a calculation assuming that future house prices will change similarly to the recent trend calculated by the Institute of Finance.
The interest rate used as data in this study is the 3-year Treasury Bond rate and the market rate, but for convenience, I calculated it based on the base rate.
It was last August that our benchmark interest rate, which had been maintained at 0.5%, started to rise again for the first time.
And in less than a year and a half, it has risen a total of 9 times to 3.25%.
That's a 2.75 percentage point increase in a year and a half.
If this happens, it is calculated that house prices could fall by nearly 14 percentage points just because of interest rates than before this cycle of interest rate hikes began.
However, it is the result of a real estate agency survey that came out yesterday that apartment prices across the country fell by nearly 4.8% from the beginning of this year until November.
Then, even if the house price a year ago is regarded as 100% and calculated from the current house price, there is room for a further drop of 9.5% or more by the end of 2024.
If you look only at the research institute of finance that we are looking at today, such an estimate comes out.
<Anchor>
That's right.
But another thing to point out is that real estate prices vary greatly depending on the region, right?
<Reporter>
Yes.
Until now, I was just talking about averages, and regional differences were turned on. I'm sorry to tell those who live in that area, but the area most affected by interest rates was the metropolitan area, excluding Seoul.
Looking at apartments in the metropolitan area alone, the trend over the past five years has been that house prices have fallen by nearly 5.8 percentage points when interest rates rise by 1 percentage point.
The five major metropolitan cities also showed similar declines, but slightly less than the metropolitan area.
House prices in Seoul tend to fluctuate the least, but as you can see, there was a clear impact.
This study only looked at the effect of interest rates as much as possible, so if there are other factors, such as the burden that has risen too much so far or the economy getting worse, it can be expected that house prices will fall further here.
Last weekend, the IMF released a report that estimated that our house prices could drop by 10 percentage points compared to the end of 2019.
However, the part that was a bit shocking in this report was that, contrary to the research we looked at today, it was viewed that way, except for the effect of rising interest rates over the past year.
Considering various forecasts, even if you think conservatively, opinions are converging that the decline in house prices this year is not the end, but that at least a double-digit decline will continue for the time being.
However, a situation like the collapse of the Japanese real estate market, which we often think about these days, will not come.
It is the view that this study also put forward that it will only be sluggish for a long time.
The Japanese real estate bubble started bursting due to commercial real estate problems, but the situation in Korea is very different.
Let's hear from the experts.
[Shin Yong-sang/Senior Research Fellow at the Institute of Finance: In Japan, commercial real estate was a problem, and for us, it is a housing problem. Since there is no problem, we expect a gradual decline rather than a Japanese-style bubble (collapse)
.
]
.
I was worried that something like that would happen to us, but it's not very likely.
<Reporter>
We are not in that situation.
This is how it is diagnosed.