Real Estate Change Has Begun

Home , Gangnam District, Goyang, Gyeonggi region

2020 Outlook

Real Estate Change has begun

Kwangsoo Lee Junghan Yoon +822-3774-1457 +822-3774-1371 [email protected] [email protected] Contents

I. 2019 Seoul housing market 3

II. 2019 Gyeonggi housing market 8

III. 2020 supply/demand 12

IV. Major variables/drivers 17

V. Real estate market outlook 22 I. 2019 Seoul housing market

Slowing price increases • Seoul apartment prices have been on the rise since May after declining sharply in early 2019. • From January to October, Seoul apartment prices rose 5.56% YoY (based on monthly changes in actual transaction prices). • While apartment prices are rising, the pace of increase has dropped sharply compared to the +17.52% rise recorded in 2018 (based on actual transaction price data for around 50,000 Seoul apartments released by the Ministry of Land, Infrastructure and Transport [MOLIT]).

Seoul apartment price change trend (based on actual transaction prices)

(%) 20

-5

-10 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10/19

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

3| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research I. 2019 Seoul housing market

Widening gaps within • Within Seoul, prices in Gangbuk district displayed the greatest rise, followed by Dongdaemun, Mapo, and Seoul Seodaemun. • Price changes in the three main districts of the Gangnam region were as follows: +6.76% for Gangnam district, +7.17% for Songpa, and +6.43% for Seocho. • Meanwhile, Gwanak, Eunpyeong, Dongjak, and Geumcheon displayed the smallest changes

Seoul apartment price changes by district (base on actual transaction prices)

(%)

30 2018 2019 25

-5

-10

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

4| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research I. 2019 Seoul housing market

Causes of price upturn • Seoul apartment transactions and prices are heavily influenced by government regulations and interest rate changes. • Regulations and interest rates affect demand. • Prices and transaction volume have moved in tandem.

Seoul apartment transaction volume and price movements

(Units) (%) Transaction volume (L) 14,000 7/19: Base rate cut from 6 MoM price change (R) 9/18: Higher taxation of high- 1.75% to 1.5% value properties; tightening of 12,000 loan regulations 5 8/19: Proposal for presale price cap 4 10,000 10/19: Implementation of presale price cap; additional lending regulations 3 8,000 2 11/18: Base rate hike from 6,000 1.5% to 1.75% 1

4,000 0

2,000 -1

0 -2 1/18 4/18 7/18 10/18 1/19 4/19 7/19 10/19

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

5| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research I. 2019 Seoul housing market

Rising demand, • Seoul apartment price increases since 2016 have been driven by demand growth amid a decline in inventory for decreasing inventory, sale. • The steady fall in turnover suggests inventory is decreasing. and slowing price gains • The turnover rate has fallen to a record-low 2.8% as of October 2019, but price growth has slowed. (Turnover rate is the number of apartment transactions as a percentage of total apartments.)

Turnover rate and actual transaction price trends in Seoul

(%) 20 Price change

Turnover 15

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 19.10

-5 The turnover rate stands at 2.8%, marking a historic low -10

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

6| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research I. 2019 Seoul housing market

Slowing demand growth, • In 2019, prices have increased, and transaction volume has recovered. record decrease in • The increase in prices and volume recovery have been driven by demand growth. inventory • Of note, the pace of price increase slowed despite demand growth and a record fall in inventory.  • This suggests slowing demand growth from individuals who own multiple homes (for speculative/investment Slower price growth purposes).

Increase in owners of multiple homes (demand) and turnover rate trend (supply)

('000) (%) 180 Chg. in owners of multiple homes (L) 12 Turnover (R) 160 10 140

120 8

100 6 80

60 4

Slowing 40 demand growth 2 (speculative/ 20 investment) in 2019 0 0 2013 2014 2015 2016 2017 2018 2019F

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

7| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research II. 2019 Gyeonggi housing market

Price uptrend weakening • From January to October, apartment prices in Gyeonggi (the province surrounding Seoul and Incheon) rose 1.08% (based on monthly changes in actual transaction prices). • Prices declined in November 2018-May 2019, climbed in June-September 2019, and fell again in October. • As in Seoul, the pace of price growth in the Gyeonggi region is slowing (based on actual transaction prices).

Apartment price changes in Gyeonggi (based on actual transaction prices)

(%) 10

-2

-4

-6

-8

-10 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10/19

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

8| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research II. 2019 Gyeonggi housing market

Falling transaction prices • Price growth has decelerated mainly in areas in which prices picked up sharply in 2018. • Areas in which YoY price growth accelerated in 2019: Siheung, Gimpo, and Gwangju • Areas in which prices displayed either declines or slowing growth: Goyang, Uiwang, Anyang, and Uijeongbu

Apartment price changes by area (based on actual transaction prices) (%)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1-10/19

Gyeonggi (2.1) (7.4) 5.5 (1.5) 2.8 (3.0) 5.3 6.7 8.4 6.6 6.6 7.9 1.1

Goyang (4.8) (6.7) 5.4 (5.0) 2.4 (5.1) 4.6 3.3 8.9 8.2 3.4 2.5 (3.8)

Seongnam (9.7) (14.2) 3.9 (1.1) 0.7 (3.9) 5.4 7.6 8.1 7.4 15.7 19.4 3.6

Siheung 27.9 (2.1) (0.7) 0.4 2.9 (1.9) 5.2 3.8 13.8 6.8 4.7 (0.9) 5.3 Gwang- 12.3 (6.5) 10.7 (2.2) 11.2 (3.8) 7.1 6.6 9.6 5.0 7.4 13.9 7.1 myeong Bucheon 2.3 (2.7) 3.8 0.4 (1.2) (2.6) 3.7 3.4 9.1 8.0 3.8 6.0 4.4

Hwaseong (6.1) (8.5) 10.3 4.6 6.8 (2.9) 1.3 3.8 15.9 16.7 9.5 10.0 2.4

Hanam 0.5 (6.1) 4.0 (2.1) 0.5 (5.5) (0.3) 7.5 29.6 63.7 25.7 30.9 1.8

Suwon (5.4) (11.7) 9.3 0.1 3.0 0.1 13.7 10.4 6.0 5.2 3.4 7.4 0.2

Yongin (9.6) (16.2) 7.8 (2.8) 2.8 (6.4) 5.6 8.5 4.8 0.9 1.4 11.6 0.8

Gwacheon 1.5 (20.9) 29.0 (0.9) (10.7) 1.0 (1.4) (1.7) (4.6) 32.5 22.0 15.4 3.9

Anyang (6.7) (8.4) 3.8 (3.4) 1.2 (8.0) 6.4 5.8 9.3 5.2 10.2 10.2 (0.7)

Gimpo (6.3) (7.2) 2.0 (4.4) 7.3 9.9 9.7 21.1 11.1 6.5 20.5 3.7 4.0

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

9| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research II. 2019 Gyeonggi housing market

Increasing • We note an increasing synchronization between Seoul and Gyeonggi in actual transaction price movements. synchronization with • During down cycles, the rate of decline tends to be similar for Gyeonggi and Seoul apartment prices. During up cycles, Gyeonggi apartments tend to lag behind Seoul apartments. Seoul apartment prices • There are significant regional variations within Gyeonggi.

Transaction price movements for Seoul and Gyeonggi

(Units) (%) Volume (L) 20,000 6 Gyeonggi price change (R) 18,000 Seoul price change (R) 5 16,000 4 14,000 3 12,000

10,000 2

8,000 1 6,000 0 4,000 -1 2,000

0 -2 1/18 4/18 7/18 10/18 1/19 4/19 7/19 10/19

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

10| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research II. 2019 Gyeonggi housing market

Rapid decline in turnover • Prices gained mainly in areas in which turnover rates dropped sharply in 2018 (Gwacheon, Seongnam, and Hanam). • Recently, inventory for sale has decreased across Gyeonggi (falling turnover rates). • We believe that price gains are decelerating and demand is contracting quickly in spite of declining inventory.

Turnover rates and price changes in Gyeonggi

Price change (%) Turnover rate (%)

2013 2014 2015 2016 2017 2018 10/19 2013 2014 2015 2016 2017 2018 10/19

Gyeonggi 5.3 6.7 8.4 6.6 6.6 7.9 1.1 7.7 8.9 10.2 8.7 7.3 6.7 3.4

Goyang 4.6 3.3 8.9 8.2 3.4 2.5 (3.8) 8.3 8.2 10.6 9.8 7.4 6.0 2.8

Seongnam 5.4 7.6 8.1 7.4 15.7 19.4 3.6 6.1 7.6 8.7 9.1 7.8 5.3 2.9

Siheung 5.2 3.8 13.8 6.8 4.7 (0.9) 5.3 9.2 10.0 11.1 9.4 8.0 6.4 4.1 Gwang- 7.1 6.6 9.6 5.0 7.4 13.9 7.1 8.2 9.5 9.3 8.8 7.7 7.2 2.9 myeong Bucheon 3.7 3.4 9.1 8.0 3.8 6.0 4.4 7.0 8.6 11.1 9.3 7.7 8.2 4.3

Hwaseong 1.3 3.8 15.9 16.7 9.5 10.0 2.4 9.2 11.4 11.0 9.7 6.0 7.0 3.9

Hanam (0.3) 7.5 29.6 63.7 25.7 30.9 1.8 6.5 7.5 9.0 6.1 6.9 5.9 2.7

Suwon 13.7 10.4 6.0 5.2 3.4 7.4 0.2 7.5 9.7 9.3 8.3 7.4 7.8 3.9

Yongin 5.6 8.5 4.8 0.9 1.4 11.6 0.8 7.9 9.1 10.1 7.7 7.3 9.8 3.1

Gwacheon (1.4) (1.7) (4.6) 32.5 22.0 15.4 3.9 4.4 4.5 8.8 8.3 7.3 4.2 2.1

Anyang 6.4 5.8 9.3 5.2 10.2 10.2 (0.7) 6.9 8.3 9.8 8.8 8.8 7.8 2.8

Gimpo 9.7 21.1 11.1 6.5 20.5 3.7 4.0 10.5 9.8 12.0 8.5 8.4 5.8 3.2

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

11| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research III. 2020 supply/demand

Investment-driven • Investment-driven demand hinges on return on equity investments (ROE). demand hinges on • If ROE rises, investment-driven demand increases. In the domestic real estate market, ROE varies depending on jeonse prices and loans. returns • Of note, as equity (down payment) requirements have recently increased amid a slowdown in jeonse price increases and tightened lending regulations, ROE has declined, driving down investment-driven demand.

Changes in the Seoul apartment market environment: ROE is on the decline (Wmn)

Price Price Transaction Year Sale price Jeonse price Equity ROE (%) Driver change direction volume Lower 2010 576.02 243.52 332.51 Down Decrease demand

2011 564.45 271.28 293.17 -1,158 -4% Down Increase Higher supply

Lower 2012 529.36 279.99 249.37 -3,508 -14% Down Decrease demand Higher 2013 517.72 316.95 200.77 -1,165 -6% Up Increase demand Higher 2014 532.52 342.65 189.88 1,480 8% Up Increase demand Higher 2015 567.57 404.71 162.86 3,505 22% Up Increase demand

2016 619.86 431.06 188.80 5,228 28% Up Decrease Lower supply

2017 701.18 452.96 248.22 8,133 33% Up Decrease Lower supply

2018 860.98 468.27 392.71 15,980 41% Up Decrease Lower supply

2019 900.00 470.24 429.76 3,902 9% Up Decrease Lower supply

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

12| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research III. 2020 supply/demand

ROE continues to decline; • The jeonse-to-sales price ratio has declined, while ROE has continued to drop due to stricter lending regulations, Investment-driven driving down investment-driven demand. • As of October 2019, Seoul apartment ROE fell to 9%. Accounting for transaction costs (including property tax, demand to soften acquisition/registration tax), ROE declined to around 7%. • Falling investment returns, coupled with higher equity requirements, are dampening investment-driven demand.

Seoul apartment ROE

(%) 50 ROE for apartments in Seoul dropped to 9% in 2019

-10

-20 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

13| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research III. 2020 supply/demand

Turnover has hit historic • In 2019, apartment turnover rates in Seoul and Gyeonggi Province have fallen to historic lows. lows • Turnover rate is an indicator of the supply of existing homes. The number of existing homes put up for sale has decreased sharply due to: 1) expectations for price increases; and 2) base rate cuts. • A decline in the number of apartments on the market has driven up prices. • Of note, Ulsan is the only city that has seen a fall in prices despite higher turnover this year.

Apartment turnover in Seoul and Gyeonggi

(%) 16 Seoul Turnover rates in Seoul Gyeonggi (2.8%) and Gyeonggi 14 (3.4%) have hit record lows

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10/19 Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

14| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research III. 2020 supply/demand

Greater tax burden to • Owners of multiple homes will likely be subject to a higher property tax burden due to an increase in the tax rate prompt owners of for high-value properties. • For third homes, the tax hike ceiling has been raised from 150% of the current rate to 300%; for second homes in multiple homes to sell areas subject to tighter regulations, the ceiling has been raised to 200%. • Amid the sharp expansion of taxes, we should inevitably see an increase in the number of houses put up for sale. However, it remains to be seen when the sell-off will begin.

High-value property tax collection outlook

(Wtr) 5 Total revenue from taxation of high-value properties projected at W4.5tr in 2023 (2.5x the 2018 level) 4

2 Rise in fair market value ratio: 95% in 2021 and 100% in 2020

0 2017 2018 2019 2020 2021 2022 2023

Source: National Assembly, Mirae Asset Daewoo Research

15| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research III. 2020 supply/demand

Price volatility rising in • Owners of multiple homes will likely be subject to a higher property tax burden due to an increase in the tax rate line with an increase in for high-value properties. • For third homes, the tax hike ceiling has been raised from 150% of the current rate to 300%; for second homes in the number of houses for areas subject to tighter regulations, the ceiling has been raised to 200%. sale • Amid the sharp expansion of taxes, we should inevitably see an increase in the number of houses put up for sale. However, it remains to be seen when the sell-off begins.

Transaction prices for Eunma apartment complex units (76.79㎡)

(Wbn) 1.85 1.82 1.80 1.78 1.77 1.75 1.74 1.72 1.67

1.60 1.60 1.59 1.56 1.56 1.54 1.54 1.54 1.55 1.51 1.52 1.48 1.48

1/18 4/18 7/18 10/18 1/19 4/19 7/19 10/19

Source: MOLIT, Mirae Asset Daewoo Research

16| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research IV. Major variables/drivers

Government's real estate • The current administration’s real estate stabilization measures: Lending regulations  tax hikes  regulations on stabilization measures development projects • We believe stricter lending regulations are not effective due to the wide variety of loans available. Meanwhile, the stimulating short-term effects of tax hikes are likely to play out over the long term. investment sentiment • Regulations on development projects, including the presale price cap, are raising concerns over a decrease in new apartment supply.

No. of searches related to presale price cap by NAVER users aged 20-39 and combined housing transaction volume in the Gangnam, Seocho, and Songpa districts. (Max. search volume = 100) Concerns about reduction in (Units) 120 new apartment supply due to 600 No. of queries (L) price ceiling; spike in home purchases by buyers aged No. of purchases (R) 20-39 100 500

80 400

60 300

40 200

20 100

0 0 1/19 2/19 3/19 4/19 5/19 6/19 7/19 8/19 9/19 10/19

Source: NAVER, Mirae Asset Daewoo Research

17| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research IV. Major variables/drivers

Impact of new housing • The impact of new housing supply (based on move-ins) on transaction prices is limited. supply on transaction • In Seoul, apartment supply (move-ins) and transaction prices are estimated to have a low correlation. prices is limited • In 2011-13 transaction prices declined despite low move-in volumes • Since 2016, prices have continued to climb despite supply growth.

Apartment move-ins (excluding rental housing) and changes in transaction prices in Seoul

('000 units) (%) Move-ins (L) Price chg. (R) 60 30

25 50

Despite the recent 20 increase in supply, 40 prices have risen 15

30 10

5 20

10 -5

0 -10 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Source: KB Real Estate, Real Estate 114, Mirae Asset Daewoo Research

18| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research IV. Major variables/drivers

Price expectations for • The biggest driver behind rising home prices in Seoul has been price expectations for redevelopment projects reconstruction/redevelopment projects , which began to gain traction after the previous price cap on the private sector was lifted in 2015. are boosting prices • Rising expectations for redevelopment projects have led to growth in demand and a reduction in supply (fewer homes put up for sale).

Seoul apartment demolitions

('000 units) 18

14 Recently, apartment demolitions in Seoul have 12 skyrocketed amid heavy reconstruction/ 10 redevelopment activities

6 Presale price cap 4 was abolished in 2015 2

0 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Source: KB Real Estate, Real Estate 114, Mirae Asset Daewoo Research

19| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research IV. Major variables/drivers

Apartment presale • In Seoul, districts where new apartment supply is concentrated have tended to see stronger price increases. volume growth driving • Growing apartment presale volume  Rising price expectations for redevelopment/reconstruction projects that are currently underway price hikes • Although home supply growth could affect prices in the long term, any impact will be marginal in the short term.

Seoul: Apartment price increases and presale volume-to-inventory ratio

(%) (%) 90 Price chg. (L) 35 Ratio (R) 80 30 70 25 60

50 20

40 15

30 10 20 5 10

0 0

Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

20| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research IV. Major variables/drivers

Key price driver for • Gwacheon has seen the fastest progress in reconstruction projects in Gyeonggi Province since 2015. apartments in Gwacheon • Some market watchers are claiming that delays to reconstruction projects caused by the recently announced presale price cap will lead to a decline in new home supply, driving price increases. • The case of Gwacheon: The lifting of the previous price cap led to presale volume growth arising from rapid progress in reconstruction projects, boosting price expectations and actual prices.

Actual transaction prices: Apartments in Gwacheon (Gyeonggi)

(%) 40

30 Prices have skyrocketed due to robust reconstruction/redevelopment activity. 20

-10

-20

-30 07 08 09 10 11 12 13 14 15 16 17 18

Source: Real Estate 114, Mirae Asset Daewoo Research

21| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research V. Real estate market outlook

Apartment presale • For 2020, we expect nationwide apartment presale volume to be around 312,000 units. volume • We forecast presale volume of 32,000 units in Seoul, 120,000 units in Gyeonggi, and 160,000 units in regions outside of the Seoul capital area (SCA; Seoul + Gyeonggi + Incheon). • Despite growing housing market-related uncertainties, nationwide presale volume is projected to remain stable in the low-300,000 unit range.

Annual apartment presale volume trend

('000 units) 600 We expect nationwide apartment presale volume to be around 300,000 units. 500

400

300

200

100

0 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20E Source: Real Estate 114, Mirae Asset Daewoo Research

22| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research V. Real estate market outlook

Apartment move-ins • We expect nationwide apartment move-ins to decline 16% YoY to 272,000 units in 2020. • By region, we forecast 2020 move-ins at 41,000 (+3% YoY) in Seoul, and 87,000 (-18% YoY) in Gyeonggi. • Move-in volumes in Gyeonggi and non-SCA areas are projected to decline YoY in 2020.

Annual apartment move-in trends by region

(‘000 units) 2013 2014 2015 2016 2017 2018 2019 2020F YoY

Nationwide 168 211 214 230 329 391 326 272 -16%

Seoul 19 37 21 25 28 36 39 41 3%

Gyeonggi 38 31 53 65 96 141 106 87 -18%

Busan 19 18 21 13 20 22 23 25 9%

Daegu 10 8 12 21 19 12 6 13 130%

Incheon 11 8 8 9 17 16 15 16 3%

Gwangju 7 8 3 10 9 7 10 10 2%

Daejeon 4 11 3 4 6 6 3 6 112%

Ulsan 7 8 9 3 9 9 11 1 -87%

Ex-major 75 99 100 98 159 175 143 104 -27% cities

Source: Real Estate 114, Mirae Asset Daewoo Research

23| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research V. Real estate market outlook

Jeonse prices • Jeonse prices of homes across the nation have been trending lower since 2018, with the rate of increase slowing in Seoul. • For 2020, jeonse prices in Gyeonggi have the potential to pick up on a decline in move-in volumes. • In non-SCA areas, slowing demand should continue to keep jeonse prices stable.

Changes in real jeonse prices

(%) 2012 2013 2014 2015 2016 2017 2018 2019

Nationwide 8.3 13.3 8.8 14.5 6.5 2.9 -0.6 -0.6

Seoul 8.1 14.1 8.1 17.7 6.2 7.2 1.6 0.4

Gyeonggi 4.5 16.6 9.9 17.1 6.6 1.8 -1.7 -1.1

Busan 8.3 7.8 6.9 12.8 10.6 -0.2 -1.8 -1.4

Daegu 15.5 15.5 14.7 14.8 -2.3 4.4 2.6 0.5

Incheon 6.7 16.1 14.3 15.8 15.0 2.1 -2.8 0.5

Gwangju 14.2 8.4 10.3 11.3 6.2 7.1 4.1 -1.1

Daejeon 6.1 12.5 -1.3 7.2 9.8 1.1 2.1 0.4

Ulsan 14.1 5.5 9.1 8.9 5.3 -5.0 -6.2 -3.6

Sejong 34.9 16.0 -7.1 24.8 27.3 -12.9 -0.6 0.8

Source: Real Estate 114, Mirae Asset Daewoo Research

24| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research V. Real estate market outlook

Jeonse-to-purchase price • The average jeonse-to-purchase price ratio for homes nationwide has been trending lower amid rapid price ratio increases; a decline in the ratio indicates falling speculative demand. • As of November 2019, the average jeonse-to-purchase price ratio stands at 52% in Seoul, 68% in Gyeonggi and 61.09% nationwide. • In Seoul, the ratio currently stands at the lowest level since 2011.

Jeonse-to-sales price ratio trends for Seoul and Gyeonggi

(%) 90 Seoul Gyeonggi 80

0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Source: MOLIT, Real Estate 114, Mirae Asset Daewoo Research

25| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research APPENDIX 1

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26| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research APPENDIX 1

Distribution United Kingdom: This report is being distributed by Mirae Asset Securities (UK) Ltd. in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (ii) high net worth companies and other persons to whom it may lawfully be communicated, falling within Article 49(2)(A) to (E) of the Order (all such persons together being referred to as “Relevant Persons”). This report is directed only at Relevant Persons. Any person who is not a Relevant Person should not act or rely on this report or any of its contents. United States: Mirae Asset Daewoo is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This report is distributed in the U.S. by Mirae Asset Securities (USA) Inc., a member of FINRA/SIPC, to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6(b)(4) under the U.S. Securities Exchange Act of 1934, as amended. All U.S. persons that receive this document by their acceptance hereof represent and warrant that they are a major U.S. institutional investor and have not received this report under any express or implied understanding that they will direct commission income to Mirae Asset Daewoo or its affiliates. Any U.S. recipient of this document wishing to effect a transaction in any securities discussed herein should contact and place orders with Mirae Asset Securities (USA) Inc. Mirae Asset Securities (USA) Inc. accepts responsibility for the contents of this report in the U.S., subject to the terms hereof, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through Mirae Asset Daewoo. The securities described in this report may not have been registered under the U.S. Securities Act of 1933, as amended, and, in such case, may not be offered or sold in the U.S. or to U.S. persons absent registration or an applicable exemption from the registration requirements. Hong Kong: This report is distributed in Hong Kong by Mirae Asset Securities (HK) Limited, which is regulated by the Hong Kong Securities and Futures Commission. The contents of this report have not been reviewed by any regulatory authority in Hong Kong. This report is for distribution only to professional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong Kong (Cap. 571, Laws of Hong Kong) and any rules made thereunder and may not be redistributed in whole or in part in Hong Kong to any person. All Other Jurisdictions: Customers in all other countries who wish to effect a transaction in any securities referenced in this report should contact Mirae Asset Daewoo or its affiliates only if distribution to or use by such customer of this report would not violate applicable laws and regulations and not subject Mirae Asset Daewoo and its affiliates to any registration or licensing requirement within such jurisdiction.

27| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research Mirae Asset Daewoo International Network

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Mirae Asset Daewoo Co., Ltd. (Seoul) Mirae Asset Securities (HK) Ltd. Mirae Asset Securities (UK) Ltd. Global Equity Sales Team Suites 1109-1114, 11th Floor 41st Floor, Tower 42 Mirae Asset Center 1 Building Two International Finance Centre 25 Old Broad Street, 26 Eulji-ro 5-gil, Jung-gu, Seoul 04539 8 Finance Street, Central London EC2N 1HQ Korea Hong Kong United Kingdom China Tel: 82-2-3774-2124 Tel: 852-2845-6332 Tel: 44-20-7982-8000

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28| 2020 Outlook [Real Estate] Mirae Asset Daewoo Research