Go with one prime home; in the short term, one less prime home

The tax reform bill has moved to the National Assembly and is reported to be likely to pass largely intact. Only the comprehensive real estate holding tax gets a modest adjustment; raising the transfer tax or strengthening the long-term holding deduction is not in this package.

The host asked whether, under these conditions, the era of the less prime home is coming, or whether, given long-run regulation, a prime home should be bought while it is still held down.

The speaker worked through the holding tax deduction limit and the long-term holding deduction structure, and read the policy as aimed mainly at homes with transfer gains approaching 10 billion won.

The host said they check KB Real Estate data every week and that Dongtan rose 0.7% last week. The explanation was that a KB weekly rise above 0.3% is worth taking seriously.

Talk turned to weekly gains running past 86 and 87 weeks toward 100. The host said they never imagined the uptrend would last this long.

The speaker said they are currently watching from the sidelines. Seoul needs monthly transactions above 5,000, but volume is around 3,600, still short of that level.

The market is a wait-and-see one in which everyone is watching who will cut prices first, so the advice was to watch the price trend closely before buying.

For very high-priced homes, the outlook is that jeonse rental supply will become harder to secure.

The speaker said they were not sure whether policy authorities are judging by combining several policies. They had the same doubt during the Moon Jae-in government, and find it unfortunate that history is repeating itself.

As a counterpoint, it was noted that not every owner can switch to monthly rent, so the limit will differ by area. The speaker agreed, adding that for homes whose jeonse was pushed to the top, converting to a partial-jeonse structure would also be a burden.

The speaker also noted that moving out midway brings penalties from financial institutions, and that one can be sued for damages for blocking the existing tenant's renewal right.

Samsung Electronics and SK hynix bonuses are reported to be affecting local home prices, and the view is that this is only the start and more is to come. The speaker's judgment is that the southeast has already risen a lot but still has room to go.

In conversations with employees who receive bonuses, the speaker said that even when a home looks good on paper, commute distance becomes a precondition. The choice is made to avoid disrupting work, and so it looks like a choice of company loyalty.

It was raised that if the bonus payments do not end this year, someone may buy from you next time, if you buy now.

The conversation closed with the explanation that the price can be sold above the purchase price, so there is room to do so.