Correlation between exchange rates and real estate prices

 Hello, this is EVER-ROBO! 😊

The topic of this posting is “A study on the correlation between exchange rates and real estate prices.”


Let's find out how much the exchange rate, along with various variables, will affect real estate prices and whether the statistical values are meaningful.


First, we visualized 12 years of data (thick red line) for a specific apartment in Seoul and the variables that affect real estate prices.


Even though the data has been processed so that it can be compared and viewed on one graph, you can see that it is quite complex and it is more difficult to find correlations visually than you might think.


If we select variables that have a relatively high influence on price and create a graph again, will we be able to find a visual correlation?


Let's look at the following graph.



What do you think when you look at the graph?


You may get the feeling that they move somewhat similarly, but based on this graph, it is difficult to be sure that each variable affects real estate prices.


As you saw earlier, visual analysis has limitations.

Therefore, we at “EVER-ROBO” tried to analyze and find relationships between variables through not only visual analysis but also statistical methods.

As I mentioned earlier, the main variable we looked at this time was “exchange rate,” and we intensively studied how much influence exchange rate data and real estate transaction prices actually have.


As can be seen from the table above, the research results confirmed that there is a significant negative correlation between the exchange rate and the actual real estate transaction price.

In fact, when the exchange rate falls, the amount of currency in the market increases, liquidity in the market increases, and market interest rates fall.

As the resulting economic recovery increases demand for real estate, real estate prices naturally rise. Conversely, a rise in exchange rates can lead to a decline in real estate prices.

This was a study that confirmed the impact of exchange rates on real estate transaction prices through visual analysis and statistical methods.


​

Thank you 😊


Comments

Post a Comment

Popular posts from this blog

Jamsil APT Status of the second week of March 2025 (Seoul, Korea)

Image
 Hello, this is Zamsil Cheongwoon Real Estate Agency. Here’s the latest update on the recent status and listings for Jamsil apartments,  including Jamsil LLL's, Ricenz, Trizium, and Lake Palace, as of the second week of March 2025. The Jamsil apartment sales market continues to show an upward trend.  Smaller units are performing particularly well, though the overall pace of price increases has slowed, and transaction volume remains low.  The continuous media coverage of rising Jamsil apartment prices appears to be fueling investor sentiment.  Interest rate cuts aimed at addressing economic downturn concerns are likely to further intensify the concentration of demand in the three main Gangnam districts. However, with the start of the new school year, buyer inquiries have decreased, and the rate of price increases has slowed.  Moving forward, the biggest factor influencing Jamsil apartment prices is expected to be the Trump administration’s tariff policies, a...
Read more

Jamsil APT Status of the first week of April 2025 (Seoul, Korea)

Image
 Hello, this is Zamsil Cheongwoon Real Estate Agency. Here’s the latest update on the recent status and listings for Jamsil apartments, including Jamsil LLL's, Ricenz, Trizium,  and Lake Palace, as of the first week of April 2025. Following the re-designation of the land transaction permit zone, the Jamsil apartment sales market has entered a wait-and-see phase.  The sudden policy shift caused confusion among consumers, and the resulting uncertainty appears to have heightened volatility by influencing investor sentiment. For the time being, apartment prices in Jamsil are likely to be heavily influenced by market sentiment, driven by ongoing economic and policy uncertainties. In such times of unclear economic outlook and real estate policy direction,  a safer approach would be to purchase a home in a solid area with resilient property values  and diversify remaining funds into various asset types to better respond to market changes. It is also advisable to consul...
Read more

Jamsil APT Status of the fourth week of November 2024 (Seoul, Korea)

Image
 Hello, this is Zamsil Cheongwoon Real Estate Agency. Here’s the latest update on the recent status and listings for Jamsil apartments, including Jamsil LLL's, Ricenz, Trizium, and Lake Palace, as of the fourth week of November 2024. Recently, Jamsil apartments have seen some sales activity, primarily for units in the 66 m² range.  Overall, only urgent sales are being traded occasionally, keeping the market relatively stable. Due to predictions that President Trump’s tariff policies will prevent interest rates from falling quickly and ongoing concerns about a domestic economic downturn, Jamsil apartment prices are expected to remain steady for the time being. However, with concerns about an economic slowdown, there is a strong possibility of future easing of real estate regulations, which may prevent a significant decline in prices. The polarization of apartment markets in Seoul is likely to continue. For those without a home, purchasing an urgent sale unit in Jamsil and diver...
Read more