The Unwavering Enthusiasm for Buying Houses in Seoul Even After June 17 and July 10

Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Yuri Kim] Despite the government's July 10 real estate measures significantly increasing holding and transaction taxes for multi-homeowners, the demand for housing purchases in the Seoul area has not subsided. Although the rate of house price increases has somewhat slowed, the dominance of buyer demand appears to be expanding. While the government is preparing supply measures, it is analyzed that the market's 'panic buying' driven by fears of rising house prices has yet to be quelled.

According to KB Real Estate Live On on the 31st, Seoul's buyer dominance index in July was 132.9, the highest since the 164.5 recorded during the September 13, 2018 measures. This is the second-highest record since statistics began in January 2000. Since the statistics are based on July 13, they reflect the situation immediately after the June 17 and July 10 measures. The buyer dominance index ranges from 0 to 200. A value above 100 means there are more buyers than sellers in the market. An index of 132 means that for every 100 people wanting to sell a house, there are 132 people wanting to buy.

The buyer dominance index in Seoul's housing market showed a sharp change. In April and May, it was only 67.0 and 68.2, respectively, meaning there were many more sellers than buyers. However, the situation reversed rapidly afterward. It surged to 127.9 in June and rose further to 132.9 in July.

Buyer dominance was more pronounced north of the Han River. In July, the buyer dominance index in Gangbuk was 140.2, a 9.5% increase from 128 in June. This appears to be because younger generations, such as those in their 30s and 40s, who felt uneasy about the recent sharp rise in house prices, concentrated their purchases on mid-to-low-priced apartments in non-Gangnam areas. In fact, from the beginning of this year to July, the average apartment price in Seoul rose by 4.11%, but the increase in non-Gangnam areas with clusters of mid-to-low-priced housing such as Nowon (7.15%), Gwangjin (5.89%), Seongbuk (5.60%), and Gangbuk-gu (5.17%) significantly exceeded this.

Even the Gangnam area, which is the target of government regulations, has seen buyer dominance continue, although it has slightly slowed compared to the previous month. The buyer dominance index south of the Han River, including the Gangnam 3 districts, was 125.9 in July, slightly down from 127.8 in June, but still well above the baseline of 100. This is a distinctly different atmosphere from earlier this year when buyer demand was sluggish, with the index below 100 until May.

Industry insiders point out that the government's approach of 'covering regulations with even stronger regulations' alone is unlikely to suppress buyer demand. Despite more than 20 real estate measures being announced, the market's resistance has only grown, and trust in policies has been lost. An industry official said, "Currently, the housing market is responding to the government's 'suppression' with 'endurance.' Regulations can suppress the market in the short term, but ultimately, the problem must be addressed from a long-term perspective, such as through continuous supply expansion."

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