Increased Apartment Transactions in Seoul Despite COVID-19

Last Month's Seoul Apartment Sales Contracts Total 8,074
Up 24.7% from Previous Month, Up 454.5% Year-on-Year

Uncertain Whether Buyer Hesitation Due to COVID-19 Will Continue This Month

[Asia Economy Reporter Chunhee Lee] Despite the spread of the novel coronavirus infection (COVID-19) and the government's stringent regulations, the volume of apartment transactions in Seoul increased last month.

According to the Ministry of Land, Infrastructure and Transport's Real Transaction Price Disclosure System on the 31st, the total number of Seoul apartment sales contracts reported by the 30th for February (based on contract date) was 8,074. This represents a 24.7% increase compared to 6,476 contracts in January and a sharp 454.5% surge compared to 1,456 contracts during the same period last year.

In particular, considering that the real estate transaction reporting period was shortened from within 60 days after the contract to within 30 days starting from the 21st of last month, the volume of transactions in February is expected to increase further. While January contracts have until the 31st of this month to be reported, February contracts made before February 21 can be reported until next month. There is also speculation that the February transaction volume could approach 9,168 contracts, the highest for February in the past five years recorded in 2018.

The increase in February transactions is analyzed to be the result of waiting buyers moving to purchase as urgent sale properties with asking prices lowered by about 200 to 300 million KRW appeared, mainly in the Gangnam 3 districts. In the case of Jamsil Jugong Complex 5 in Jamsil-dong, Songpa-gu, only 3 sales were recorded in January, but 11 have already been reported in February. The transaction price for the 76.5㎡ (exclusive area) unit, which had risen to 2.1556 billion KRW in December last year, fell to 1.8406 billion KRW last month.

However, it is uncertain whether this increase in transaction volume will continue into this month. As the housing transaction market contraction is becoming more pronounced due to the spread of COVID-19, the purchase demand has begun to shrink significantly this month due to the burden of holding taxes caused by the sharp rise in publicly announced prices.

According to KB Kookmin Bank, the apartment buyer dominance index in Seoul continues to decline. In the fourth week of March, Seoul's buyer dominance index dropped sharply to 81.1 from 91.8 the previous week. In particular, Gangnam fell from 82.8 the previous week to 73.1. In fact, the number of apartment transaction reports in Seoul for March currently stands at 2,602, and even considering the remaining reporting period, it is unlikely to reach the level of February.

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