[One Month After the 12·16 Measures] Gangnam 'Holds Firm,' Only Tenants Suffer... March as a Turning Point (Comprehensive)

Panoramic view of the 'Els' apartment complex in Jamsil-dong, Songpa-gu, Seoul.

"Sellers say, 'If I don't sell, I don't sell, but I can't lower the price any further.' Buyers call and say, 'The price hasn't dropped much yet.' Since the measures, it's been a constant game of 'push and pull.' Transactions have almost stopped, but sellers are not putting out 'urgent sales' with price cuts of 200 to 300 million KRW." (An official from a brokerage in Jamsil-dong, Songpa-gu)

It has been a month since the announcement of the December 16 housing market stabilization measures. With more than 20 measures covering taxes, loans, subscription, and supply, sales have frozen and in some areas, jeonse prices have surged sharply. In the Gangnam area, the government's main target for real estate stabilization, price declines centered on reconstruction projects have been observed, but most sellers have been sticking to 'holding out.' Buyers are also waiting for further price drops rather than moving on 'urgent sales' adjusted by about 100 million KRW in these areas. As loans for ultra-high-priced homes over 1.5 billion KRW were blocked, waiting buyers turned their attention to lower-priced properties or gave up on buying and sought jeonse instead. The expansion of regular admissions and the abolition of autonomous private high schools coinciding with the winter vacation moving season caused jeonse prices to jump by hundreds of millions of KRW within a month or two.

◆Urgent sales appear in reconstruction areas, new buildings still 'holding out'... Learning effect at work= On the 13th, both the Gangnam and Gangbuk real estate markets were completely frozen. In Gangnam, some who missed the buying opportunity during the recent price surge made some purchases, while in Gangbuk, transactions mainly involved properties under 900 million KRW. On-site, it was felt that transaction volumes had dropped by 80-90% compared to before the measures.

The Jamsil-dong area in Songpa-gu showed different patterns between reconstruction and general apartments. The 'Elite' complexes?Els, Resentz, and Tridium?saw exclusive area units of 84-85㎡ exceed 2 billion KRW last year, and 59-60㎡ units surpassed 1.5 billion KRW. Jamsil Els reported an actual transaction price of 2.17 billion KRW in December last year. Their recent asking prices have reportedly dropped by 50 to 100 million KRW. A representative from a brokerage in Jamsil-dong B said, "Due to a learning effect where prices adjusted somewhat and then rose again, urgent sales with large price cuts have not yet appeared. This is different from before when asking prices dropped by 200 to 300 million KRW after the measures."

The price gap between sales and jeonse is large in reconstruction areas, leading to bigger adjustments in asking prices. The Jamsil Jugong 5 complex saw asking prices for 85㎡ units drop from about 2.2 billion KRW to around 1.95 billion KRW recently. It is explained that multi-homeowners, fatigued by delays in reconstruction approvals, are putting out urgent sales to take advantage of tax benefits in the first half of the year.

The atmosphere in Daechi-dong, Gangnam-gu, and Banpo-dong, Seocho-gu, was similar. The head of brokerage C in Daechi-dong said, "Raemian Daechi Palace was rising by 100 million KRW per month before the measures, but now it is very quiet. However, the atmosphere is not that asking prices are falling. Occasionally, urgent sales adjusted by about 100 million KRW appear, but most asking prices are not much different from before the measures." The head of real estate D in Banpo-dong also said, "Everyone here expects prices to keep rising, so they don't lower prices much when listing."

In Gangbuk, in Nowon-gu and Seongdong-gu, apartments under 900 million KRW sold quickly when listed. A representative from brokerage E in Junggye-dong, Nowon-gu, said, "The current market price for 84㎡ units in Junggye Jugong 5 complex is 830 to 850 million KRW, which actually rose after the announcement of the measures. On the 12th, a 72㎡ (28-pyeong) unit sold for 770 million KRW, 40 million KRW higher than before," adding, "Due to severe supply shortages and high educational demand, prices are expected to rise further." A representative from brokerage F in Eungbong-dong, Seongdong-gu, said, "The Eungbong Daerim 2nd complex 59㎡ unit, which was 640 million KRW in November-December last year, recently sold for 675 million KRW," and "The Haengdang Daerim 59㎡ unit, which was about 700 million KRW in October last year, has recently risen to 800 million KRW."

In Ahyeon-dong, Mapo-gu, sellers' asking prices were also similar to before the measures. A representative from nearby brokerage G said, "The asking price for a 59㎡ unit ready for move-in at Mapo Raemian Prugio is around 1.3 to 1.4 billion KRW, similar to before," but added, "Unlike before, when asking prices never budged, recently, due to very low demand, if someone wants to buy, about 50 million KRW can be negotiated."

Panoramic view of the 'Mapo Raemian Prugio' apartment complex in Ahyeon-dong, Mapo-gu, Seoul.

◆Jeonse market also confused... Jeonse prices in Banpo rising by hundreds of millions= In some parts of Gangnam, the jeonse shortage was severe. The sharp price increases, difficulty in obtaining loans, buyers turning to jeonse, and winter vacation school district demand overlapped. The head of real estate D in Banpo-dong said, "As buying has become difficult, people seem to be turning to jeonse. The jeonse asking price for Raemian Prestige has risen by about 200 million KRW compared to before the measures." In Daechi-dong, where school district demand is high, jeonse listings remained scarce. A representative from brokerage H in Daechi-dong said, "Jeonse listings were always scarce, but before the measures, they were 'rare' but not 'impossible to find.' Now, it's reached the level of 'impossible to find.'"

However, the atmosphere in Jamsil was different. The Jamsil Jugong 5 complex, with relatively cheaper jeonse prices around 400 to 500 million KRW compared to surrounding areas, recently saw asking prices rise by about 50 million KRW. Although listings decreased in the large 'Elite' complexes after the December 16 measures, many jeonse listings appeared. Jeonse prices dropped by about 50 to 100 million KRW. It is explained that 85㎡ units, which were up to 1.1 billion KRW, have recently fallen below 1 billion KRW.

Jeonse prices in Gangbuk also generally trended upward. A representative from brokerage F in Eungbong-dong said, "Jeonse prices for 84㎡ units in Haengdang Daerim are around 550 million KRW," adding, "Until the end of last year, several units traded at 500 million KRW, but prices have already risen by 50 million KRW."

◆How many multi-homeowner listings and pre/post price ceiling system sales... 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 regulated areas for over 10 years lasts until the end of June, many listings are expected to move during the spring moving season. The private land price ceiling system will be fully applied at the end of April. From March, buyers will face many variables, including the requirement to submit 15 types of documents when purchasing homes over 900 million KRW in Seoul. The head of brokerage C in Daechi-dong said, "Some are already feeling burdened by the funding plan documents. Some even gave up deposits worth hundreds of millions of KRW on deals made before the measures. Because the transaction amount is large, they were supposed to pay the balance in March but seem to have felt the burden."

Kim Deok-rye, head of the Housing Research Office at the Korea Research Institute for Human Settlements, said, "It has been a month since the policy was announced, but it takes time for the policy to take effect and reflect in the market. While it is true that the rate of price increase is slowing, it is still too early to judge concerns about balloon effects on properties under 900 million KRW. We need to observe how the market reacts to issues continuing this spring."

Ham Young-jin, head of the Zigbang Big Data Lab, said, "According to the December 16 measures, transactions of high-priced homes such as reconstruction projects have sharply contracted, and the market is in a wait-and-see mode. For the time being, low-priced home transactions will continue amid this lull." He added, "Demand is expected to shift to the spring sales season, so it is necessary to monitor market trends. Measures should also be prepared to address overheating in the sales market, which will intensify with the full implementation of the price ceiling system in April."

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