Gyeonggi-do Apartment Sales Recover in February After Slump

Recovery in sales volume under 600 million KRW mainly in non-regulated areas
Seoul's transaction volume continues to decline... "Recovery difficult for now due to expanded funding plan requirements"

Monthly Trends of Apartment Sales Volume in Seoul/Gyeonggi

[Asia Economy Reporter Onyu Lim] The volume of apartment sales transactions in Gyeonggi Province, which had slowed down after the December 16 real estate measures last year, significantly increased in February. In particular, the proportion of transactions under 600 million KRW, which have relatively less financial burden, was high, especially in non-regulated areas. On the other hand, in Seoul, transaction volumes continued to decline across all price ranges. With the recent expansion of areas required to submit funding plans, it is expected that the recovery of transaction volumes will not be easy.

According to Zigbang on the 16th, in Gyeonggi Province, the volume of sales transactions slightly decreased immediately after the announcement of the December 16 measures regardless of regulation application, but showed signs of recovery in February. In regulated areas, transactions slightly increased from 10,436 in November last year to 10,540 in February, but in non-regulated areas, transactions rose significantly from 10,330 to 15,455.

Monthly Trends of Apartment Sales Volume by Price Range in Regulated and Non-Regulated Areas in Gyeonggi Province

Looking at the price ranges, sales transactions over 600 million KRW in regulated areas of Gyeonggi decreased compared to November, but transactions under 600 million KRW steadily increased. In non-regulated areas, transactions between 600 million KRW and 900 million KRW averaged 330 per month from December to February, showing a slight increase, while transactions under 600 million KRW averaged about 11,900 per month during the same period, marking an increase of more than 19% compared to November. Especially, the transaction volume in February surged to 15,046.

Ham Young-jin, head of Zigbang Big Data Lab, analyzed, "It appears that apartment transactions in areas and price ranges free from regulations within Gyeonggi Province dominated the market," adding, "Transactions were mainly for apartments with relatively low financial burden, even if their investment value was not high."

Monthly Trends of Apartment Sales Volume in Seoul by Price Range

Unlike Gyeonggi, Seoul, where all areas are designated as speculative overheated zones and adjusted target areas, saw a decline in sales transactions after the December 16 measures. Transactions were 11,492 in November but decreased by 16.5% to 9,598 in December, and further dropped by 34.7% to 6,267 in January compared to the previous month.

Looking at the price ranges, transaction volumes decreased across all price brackets. Transactions over 1.5 billion KRW dropped from 1,144 in November to 676 in December, then to 177 in January, and further down to 222 in February. Transactions between 900 million KRW and 1.5 billion KRW also decreased monthly from 2,212 to 1,570, 771, and 691 respectively during the same period. The number of transactions in February was only about 31% of those in November.

Ham explained, "Transactions for apartments priced between 600 million KRW and 900 million KRW or under 600 million KRW also decreased, but the decline was relatively smaller because these were relatively free from mortgage loan regulations even within regulated areas."

It is analyzed that it will not be easy for apartment transaction volumes to increase in the near future. The government continues to strengthen mortgage loan regulations on houses priced over 900 million KRW in regulated areas, and from the 13th, the areas required to submit funding plans have been expanded.

Ham said, "With the overall worsening of social conditions and economic circumstances due to the spread of COVID-19 and ongoing real estate regulations, it seems difficult for the overall apartment sales market to see an increase in transaction volumes," adding, "However, transactions focused on low-priced apartments in regulated areas or mid-to-low priced apartments in non-regulated areas, which are relatively free from regulations and funding constraints, are expected to provide some relief."

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