Real Estate - South Korea | Statista Market Forecast

South Korea's Real Estate market market is expected to reach a staggering value of US$12.25tn in 2024.
It is worth noting that the Residential Real Estate segment plays a dominant role in this market, projected to have a market volume of US$8.29tn in the same year.
Looking ahead, the market is anticipated to experience an annual growth rate of 1.10% (CAGR 2024-2029), resulting in a market volume of US$12.94tn by 2029.
In a global context, it is important to highlight that United States is expected to generate the highest value in the Real Estate market sector, with a projected worth of US$132.0tn in 2024.
South Korea's Real Estate market market showcases significant growth potential, positioning it as a key player in the industry.
South Korea's real estate market is experiencing a surge in demand for luxury apartments in major cities.

Definition:

The real estate market refers to the transaction of properties, including residential properties (such as houses and apartments) and commercial properties, such as office buildings and industrial properties. Apart from property sales, this market includes leases and the value of real estate.

Structure:

The real estate market comprises residential and commercial real estate. The residential real estate market covers real estate transactions and leases, and residential real estate leases are divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and real estate renters as well.

Residential real estate (houses and apartments)
Commercial real estate (office buildings, retail spaces, warehouses, industrial properties)

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

The Real Estate market in South Korea has been experiencing significant development and growth in recent years.

Customer preferences: South Korean customers have shown a strong preference for investing in real estate due to its stability and potential for long-term returns. The desire to own property is deeply ingrained in the culture, as it is seen as a symbol of wealth and success. Additionally, the low interest rates offered by banks have made it more affordable for individuals to purchase property, further driving demand in the market.

Trends in the market: One of the key trends in the South Korean real estate market is the increasing demand for residential properties in urban areas. As the population continues to grow and more people migrate to cities, the need for housing has skyrocketed. This has led to a surge in construction activities and the development of high-rise apartment complexes to meet the growing demand. Another trend in the market is the rise of smart homes and sustainable buildings. South Korea is known for its technological advancements, and this has translated into the real estate sector as well. Developers are incorporating smart home features such as remote-controlled lighting and heating systems, as well as energy-efficient designs to attract environmentally-conscious buyers.

Local special circumstances: One unique aspect of the South Korean real estate market is the presence of the Jeonse system. Jeonse is a rental system where tenants provide a large lump sum deposit to the landlord instead of paying monthly rent. This system has gained popularity due to its affordability and the ability to recoup the deposit at the end of the lease period. However, the increasing demand for Jeonse properties has led to a shortage of available units, driving up prices and making it more difficult for individuals to find affordable housing.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the development of the real estate market in South Korea. The country's strong economic growth and stable political environment have attracted both domestic and foreign investors. Additionally, favorable government policies and incentives have encouraged investment in the real estate sector, further driving growth. Furthermore, the low interest rates set by the central bank have made it more affordable for individuals to obtain mortgages and invest in property. This has fueled demand in the market and contributed to the overall growth of the real estate sector. In conclusion, the Real Estate market in South Korea has been experiencing significant development and growth due to customer preferences for property ownership, the increasing demand for residential properties in urban areas, the rise of smart homes and sustainable buildings, the unique Jeonse rental system, and underlying macroeconomic factors such as strong economic growth and favorable government policies.

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

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Real Estate - South Korea

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