Eunma '0' Jamsil Jugong '1'... Seoul Apartment Transaction Freeze

2061 Transactions in October... Half the Volume of September
Gangnam Declines While Outskirts Hit New Highs, Showing Mixed Trends

[Asia Economy Reporter Donghyun Choi] The phenomenon of a transaction cliff in Seoul apartment sales is intensifying. In major reconstruction complexes in the Gangnam area, there are numerous complexes with zero transactions, while transactions at reduced prices are also occurring one after another. However, some complexes are still seeing record-high transactions, indicating that a mixed trend will continue for the time being amid a tug-of-war between sellers and buyers.

According to the Seoul Real Estate Information Plaza on the 2nd, the number of apartment transactions in Seoul last month was 2,061. This is just over half of the 3,751 transactions in September. Since the reporting deadline for actual transactions is within 30 days after the contract, additional reports will increase, but industry experts predict that the volume will not even reach the level of September if this trend continues. Compared to the historical October transaction volumes since the statistics began in 2006, the transaction cliff phenomenon is even more pronounced. Except for 2008, which was the lowest due to the global financial crisis (1,519 transactions), it is expected to record the lowest level. Historically, October is a peak moving season, with transaction volumes exceeding 6,000 in all but six years, and surpassing 10,000 four times.

Reconstruction complexes in land transaction permission zones such as Daechi and Cheongdam-dong in Gangnam-gu and Jamsil-dong in Songpa-gu are completely devoid of transactions. Since transactions are only possible for actual residence purposes, demand is inevitably limited. There have been no recorded sales transactions in October so far at Eunma Apartments in Daechi-dong. Previously, there were only 3 and 1 transactions in August and September, respectively. In Jamsil-dong, only one transaction of a 76.5㎡ (exclusive area) unit in Jugong Complex 5 was made last month at 2.228 billion KRW, which is 25 million KRW lower than the previous transaction.

The situation is similar in surrounding areas such as Dogok and Apgujeong-dong in Gangnam-gu. A Samsung Raemian 84.89㎡ unit in Dogok-dong was sold for 2.26 billion KRW, 30 million KRW lower than the previous transaction. In Apgujeong-dong, a 110.82㎡ unit on the 11th floor of Shinhyundai 12th complex was sold last month for 2.34 billion KRW. Compared to a similar unit sold the previous month for 2.74 billion KRW, this is a price drop of 400 million KRW. A representative from A Real Estate Agency in Apgujeong-dong said, "Since last month, transactions have become scarce and asking prices are falling," adding, "Overall, homeowners are withdrawing listings and adopting a wait-and-see attitude, but some sellers are showing signs of lowering prices to clear their properties."

The sharp contraction in transactions is attributed to the government's successive high-intensity regulations such as the June 17 and July 10 measures. With restrictions on actual residence, loan regulations, and increased taxes on multi-homeowners, buying demand has weakened, and sellers are also withdrawing listings. According to statistics from the real estate big data company Asil, among the 17 metropolitan cities and provinces nationwide, Seoul saw the largest decrease in apartment listings since the July 10 measures until now. During this period, listings plummeted by 40.5%, from 75,490 to 44,966.

However, despite this situation, there are forecasts that the Seoul apartment sales market will not easily shift to a downward trend. Some complexes are still seeing record-high transactions. In fact, recent weekly price increases show that while prices in the Gangnam area have stalled, apartment sales prices in outer areas such as Gangdong-gu (0.17%), Nowon (0.16%), Geumcheon-gu (0.15%), and Gwanak-gu (0.11%) have risen relatively prominently. According to KB Real Estate's monthly housing market trend statistics, the Seoul apartment buyer dominance index, which had been declining for three consecutive months, surprisingly rebounded to 73.8 last month. This index is based on a survey of member brokerage offices and ranges from 0 to 200, where a value above 100 indicates "more buyers" and below 100 indicates "more sellers."

Seojinhyung, president of the Korea Real Estate Society (professor at Gyeongin Women's University), said, "In the ongoing transaction cliff situation, both high-priced and low-priced complexes are appearing simultaneously," and predicted, "Unless government policy shifts from purely regulatory measures to expanding supply, this trend will continue for the time being."

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