Sharp Decline in Transactions of Seoul Apartments Over 900 Million Won After 12·16 Measures

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Since the announcement of the December 16 real estate measures last year, transactions of apartments priced over 900 million KRW in Seoul have significantly decreased.

According to an analysis by KB Real Estate Live On of the Ministry of Land, Infrastructure and Transport's actual transaction data, the volume of apartment sales nationwide showed a sharp decline in transactions of apartments priced over 900 million KRW in Seoul and Gyeonggi Province during the three months following the December 16 measures.

The number of reported actual transactions for apartments over 900 million KRW in Seoul was 3,731, a 61% (6,026 transactions) decrease compared to the three months before the measures (9,757 transactions). This decline is 2.3 times greater than the decrease in transactions for properties priced under 900 million KRW.

Even considering the 30-day reporting deadline for transactions, the decrease in sales volume for apartments over 900 million KRW is substantial. In fact, the number of actual transactions for apartments under 900 million KRW was 16,837, only 25% (5,889 transactions) less than the 22,726 transactions in the three months before the measures.

The Gangnam 3 districts, where apartments over 900 million KRW are concentrated, saw an average 70% (3,102 transactions) decrease from 4,376 transactions in the three months before the measures to 1,274 transactions in the three months after. Gangnam-gu dropped from 1,646 to 447 transactions (72%, 1,199 transactions), Seocho-gu from 1,148 to 334 transactions (70%, 814 transactions), and Songpa-gu from 1,582 to 493 transactions (68%, 1,089 transactions).

In Gyeonggi Province, transactions decreased by 56% (1,377 transactions) from 2,454 to 1,077 during the same period. Yeongtong-gu in Suwon City fell from 239 to 97 transactions (59%, 142 transactions), Bundang-gu in Seongnam City from 1,293 to 515 transactions (60%, 778 transactions), and Gwacheon City from 197 to 31 transactions (84%, 166 transactions).

Busan, centered around Haeundae-gu where apartments over 900 million KRW are concentrated, saw transactions decrease from 310 to 228 (26%, 82 transactions), and Daegu from 170 to 98 (42%, 72 transactions).

After the December 16 measures, the only areas in the metropolitan area where transactions of apartments under 900 million KRW increased were Gyeonggi Province and Incheon. Gyeonggi Province saw a 27% (14,451 transactions) increase from 52,771 to 67,222 transactions. Except for Gwacheon, Gwangmyeong, Seongnam, and Hanam, transactions increased mainly in non-regulated areas.

Incheon saw a 41% (4,800 transactions) increase from 11,545 to 16,345 transactions. In the provinces, increases were observed in Gangwon (18%), Sejong (32%), Jeonbuk (10%), and Jeonnam (7%).

The volume of transactions for high-priced apartments over 900 million KRW is expected to decline further. This is due to a sharp 21.1% rise in official apartment prices this year, increasing the burden of property taxes.

On the other hand, the official prices of multi-family housing priced under 900 million KRW rose only 1.9%, lower than last year's 2.8% increase. The property tax burden is relatively lighter compared to high-priced apartments over 900 million KRW. Therefore, the housing market is shifting towards real demand for mid- to low-priced apartments under 900 million KRW, and non-homeowners may delay purchases and remain in rental housing, potentially increasing rental transaction volumes.

Lee Mi-yoon, a senior expert at KB Kookmin Bank's Real Estate Platform Department, explained, "The decline in transaction volume is expected to continue mainly in the Gangnam area of Seoul, where the proportion of apartments over 900 million KRW is high," adding, "Due to financial market instability and real economy contraction, uncertainty in the real estate market is increasing, so additional purchases in the housing market should be approached cautiously."

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