The Bank of Korea raised the benchmark interest rate to an annual 3.00%, and it is expected that housing transactions will further contract. Experts analyze that due to already high loan interest rates and supply shortages, the interest rate hike will not significantly trigger a decline in house prices. However, there is a possibility that the wait-and-see sentiment will intensify further in high-priced areas such as Gangnam. On the other hand, it is expected that the price increase trend will continue in the mid-to-lower priced areas of Seoul. The interest rate hike is expected to accelerate the conversion to monthly rent due to the increased burden of jeonse loans, and on the supply side, there is a possibility that upward pressure on presale prices will occur due to rising construction costs and PF financing costs.
