It was found that the index showing the degree of overvaluation of housing prices, comprehensively considering housing sales prices, rents, and loan rates, peaked in the second quarter of 2021 and is on the decline.
According to the Bank of Korea today (25th), as a result of calculating the Z-score index used by the International Monetary Fund (IMF) to evaluate the level of housing prices in Korea, the second quarter of 2021 was 1.5, the last 10 years. was the highest during
The Z-score index is an indicator that comprehensively shows the degree of overvaluation or undervaluation of housing prices.
Specifically, after standardizing three indicators (average during period = 0, standard deviation = 1), such as price income ratio (PIR), price to rent ratio (PRR), and housing-related loan interest rates, Calculate the average value of the three indicators for each.
For example, when the PIR is 10 times and the loan interest rate is 5%, since each indicator has a different unit or size, standardize them, set the average to 0, and then judge whether the housing price is overvalued through the movement of the index. is.
An index higher than 0 indicates that the stock is overvalued relative to the long-term average, while a value lower than 0 indicates that the stock is undervalued.
Specifically, from the first quarter of 2012 to the second quarter of last year, the BOK calculated the index using the national household PIR (income quintile), PRR, and deposit bank mortgage interest rates provided by KB Real Estate.
As a result, the Z-score index was negative, such as -1.3 in the first quarter of 2012, but turned positive in the second quarter of 2016 (0.1), exceeding the long-term average of 0.
After that, it showed a low level until 0.2 in the second quarter of 2019, then rose to 0.4 in the third quarter of 2019 and 0.7 in the fourth quarter.
The index rose from 0.7 in the second quarter of 2020 to 1 in the third quarter, followed by 1.2 in the fourth quarter, 1.3 in the first quarter of 2021, and 1.5 in the second quarter, peaking during the survey period.
However, after turning down to 1.4 in the third quarter, it fell to 1.4 in the fourth quarter, 1.1 in the first quarter of last year, and 0.8 in the second quarter.
The fact that the Z-score index, which comprehensively evaluates the level of housing prices, peaked in the second quarter of 2021 means that the degree of overvaluation of housing prices was the highest at that time.
However, the overall index is showing a downward trend as the mortgage rate, one of the detailed items of the Z-score index, has turned negative due to the Bank of Korea's successive hikes in the benchmark interest rate since then.
If you look at the index details of the 2021th quarter of 2021, when the z-score index was the highest, PIR was 2.1, PRR was 1.4, and the loan interest rate was analyzed as 1.
On the other hand, in the case of the second quarter of last year, the PIR was the same at 2.1, and the PRR slightly decreased to 1.3, but the loan interest rate index was calculated as -1.1, bringing down the overall index.
In fact, the deposit bank housing mortgage interest rate (based on weighted average and new handling amount) compiled by the Bank of Korea was 2.72% in the second quarter of 2021, but it was 2.90% in the third quarter, 3.47% in the fourth quarter, 3.86% in the first quarter of 2022, and 3.95% in the second quarter. , soared to 4.43% in the third quarter.
An official from the Bank of Korea said, "The higher the loan interest rate, the lower the housing price, and the higher the valuation." There is a high probability that there will be.”
(Photo = Yonhap News)