February Housing Transactions Increased by 13.7%... But Gangnam 3 Districts Down by 18.9%

▲ Housing Sales Transaction Volume Trend in February 2020 (Provided by Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Lee Chun-hee] Last month, the nationwide housing sales transaction volume increased. However, due to the impact of the December 16 real estate measures, Seoul and the Gangnam 3 districts showed a decline. Considering that the decrease in transaction volume caused by the spread of the novel coronavirus infection (COVID-19) has not been reflected due to the time lag in the transaction reporting process, it is highly likely that a significant decrease in transaction volume will be reflected in the statistics starting next month.

The Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board announced on the 19th that last month’s housing sales transaction volume was 115,264 cases, an increase of 13.7% from 101,334 cases in the previous month. This is a 165.3% increase compared to 43,444 cases in the same month last year. This is analyzed as a base effect caused by the 'transaction cliff' incident following the September 13, 2018 measures.

Seoul, especially the Gangnam area, which was the main target of the December 16 measures announced last year, saw a decrease in transaction volume compared to the previous month. Last month, Seoul’s housing sales transaction volume was 16,661 cases, down 1.0% from 16,834 cases in January. In particular, the Gangnam 4 districts (Gangnam, Seocho, Songpa, and Gangdong), which were directly hit by regulations such as the complete ban on mortgage loans for houses exceeding 1.5 billion KRW, recorded 2,458 transactions, a decrease of 18.9% compared to 3,030 cases in the previous month. However, this was nearly four times the 633 cases recorded in the same month last year.

The total transactions in the metropolitan area, including Seoul, Incheon, and Gyeonggi, were 66,456 cases, a 20.0% increase from 55,382 cases in the previous month. Transactions in provincial areas were 48,808 cases, up 6.2%.

February’s transaction volume was found to have increased compared to January last year, when transactions sharply declined due to the September 13, 2018 measures. Last month’s transaction volume was double the 50,286 cases from the same period last year, and Seoul also saw a sharp increase of 178.7% compared to 6,040 cases in January last year.

By type, all showed an increasing trend. Last month, apartment transactions were 87,642 cases, up 15.3% from 75,986 cases in the previous month. Compared to 28,293 cases in the same month last year, this is an increase of 209.8%. Non-apartment housing transactions last month were 27,622 cases, a 9.0% increase from the previous month and an 82.3% increase compared to the same month last year.

However, the housing sales transaction volume announced on this day does not reflect the housing market downturn caused by the spread of COVID-19 due to the time lag in the actual transaction reporting process.

This is because February’s transaction volume is based on data reported in February. Considering the existing actual transaction reporting period of 60 days, the figures include transactions up to December last year. However, from the 21st of last month, the actual transaction reporting period was shortened, so contracts made after this date must be reported within 30 days.

An official from the Ministry of Land said, "Although a decrease in housing sales transactions is expected due to COVID-19, the impact of COVID-19 on February’s sales transactions appears to be minimal so far."

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