[One Month After the 12·16 Measures] Holding Out vs Testing the Waters... 'Price Tug-of-War'

One Month After the 12·16 Measures, Real Estate Market Freezes
Urgent Reconstruction Sales, Shortage of Jeonse, and Sharp Drop in Mortgage Loans

"Sellers are holding firm, saying 'If I don't sell, I don't sell, but I can't lower the price any further.' Buyers are watching cautiously, thinking 'The price hasn't dropped much yet.' Since the measures, it's just been a game of push and pull. Transactions have almost come to a halt." (A real estate agent from Jamsil-dong, Songpa-gu)

One month after the announcement of the December 16 housing market stabilization measures, the real estate market has rapidly frozen. Both the Gangnam and Gangbuk real estate markets have been helpless against the comprehensive measures covering taxes, loans, subscription, and supply. Even at bank counters issuing loans, customers appear confused by the strengthened regulations. One month after the December 16 measures, the real estate market is plunging into chaos.

◆Urgent price drops in reconstruction properties; new buildings still 'holding firm'... Learning effect at work= In the Gangnam area, price reductions centered on reconstruction properties have been observed, but most sellers remain consistent in 'holding firm.' The asking prices for Els, Licenz, and Trizium (El, Li, Tri) in Jamsil-dong, Songpa-gu, with exclusive areas of 84-85㎡, have dropped by 50 million to 100 million KRW compared to before the measures. These are places where Els reported actual transaction prices close to 2 billion KRW, such as 2.17 billion KRW in December last year. Reconstruction properties, which have a large gap between sale and jeonse prices, saw even larger price adjustments. The asking price for a 76㎡ unit in Jamsil Jugong 5 complex, which was around 2.2 billion KRW, recently dropped to about 1.95 billion KRW. The atmosphere in Daechi-dong, Gangnam-gu, and Banpo-dong, Seocho-gu, was similar. The representative of B real estate agency in Daechi-dong explained, "Raemian Daechi Palace was rising by 100 million KRW per month before the measures, but now it's very quiet."

In Gangbuk, overall transactions are sluggish, but apartments priced under 900 million KRW are quickly sold once listed. A real estate agent from Junggye-dong, Nowon-gu, said, "The current market price for an 84㎡ unit in Junggye Jugong 5 complex is 830 to 850 million KRW, which has actually increased since the announcement of the measures," adding, "Due to the severe shortage of supply and high educational demand, prices are expected to rise further."

Jeonse prices have surged by hundreds of millions of KRW within a month or two, coinciding with the winter vacation moving season and issues such as the expansion of regular schools and abolition of autonomous private high schools. A real estate agent from Daechi-dong said, "Before the measures, jeonse listings were 'rare,' but now they have become 'impossible to find.'"

◆'Loan ban on apartments over 1.5 billion KRW'... Growth in mortgage loans also slows= The growth in housing mortgage loans from banks has also slowed. With the government declaring a 'war on real estate speculation' and new loan-to-deposit ratio regulations forcing banks to manage loan and deposit balances, mortgage loan contraction is expected to accelerate. The total outstanding housing mortgage loans at the five major commercial banks?KB Kookmin, Shinhan, KEB Hana, Woori, and NH Nonghyup?stood at 409.9279 trillion KRW at the end of December last year, increasing by only 0.3% from the previous month. At the end of November, the balance was 408.8049 trillion KRW, up 0.7% from the previous month. The growth rate of mortgage loans slowed by 0.4 percentage points. A representative from a commercial bank said, "The change in trend is not very pronounced, but considering this is the early stage of the measures, the contraction is clear," adding, "Customers are confused by the strengthened loan regulations."

◆From multi-homeowner listings to full application of price ceiling system... This spring is a turning point= Experts point to this spring (March-April) as the period to confirm the market's full response to the December 16 measures. Since the temporary exemption from capital gains tax surcharges for multi-homeowners holding properties in designated adjustment areas for over 10 years ends by late June, a significant amount of properties expected to be put on the market will likely move during the spring moving season. Starting in March, the number of documents required when purchasing homes over 900 million KRW in Seoul will increase to 15 types, and by the end of April, the price ceiling system for private land supply will be fully implemented.

Ham Young-jin, head of the Zigbang Big Data Lab, said, "For the time being, low-priced housing transactions will continue amid a lull in overall transactions," adding, "Measures should also be prepared to address the overheating of the pre-sale market, which will intensify in April."

This content was produced with the assistance of AI translation services.