'Calm Down' They Said... The Return of Panic Buying

Housing Sales Volume Increased by 25.9% Month-on-Month Last Month
Impact of Jeonse Shortage Due to Two Lease Laws

Transaction Volume Growth Concentrated in Provinces, Decrease in Seoul Metropolitan Area
Experts Say "Designation of Regulated Areas Alone Is Not Enough to Calm the Market"

[Asia Economy Reporter Chunhee Lee] Last month, the nationwide housing sales volume surged by 25.9% compared to the previous month, surpassing 100,000 transactions again after four months. Amid the ongoing upward trend in the sales market, there are criticisms that the government’s rushed enforcement of the two lease laws triggered a rental crisis, which in turn sparked another wave of 'panic buying.'

According to the 'November Housing Sales Volume' data released by the Ministry of Land, Infrastructure and Transport on the 24th, last month’s nationwide housing sales volume was 116,758 transactions, a 25.9% increase from 92,769 transactions in the previous month. Nationwide housing transactions had decreased after reaching the second highest record since statistics began in 2006, with 141,419 transactions in July, followed by 85,272 in August and 81,928 in September. This decline was due to the government’s strong regulations on multi-homeowners through measures such as the June 17 and July 10 policies, which somewhat dampened buying momentum.

However, the transaction volume recovered to the 90,000 range in October and then surged to over 110,000 last month, meaning the effects of the measures lasted less than two months. The government’s market assessment that "panic buying has significantly calmed down" has thus become questionable.

The increase in transaction volume last month was particularly notable in provincial areas. Housing transactions in the provinces reached 75,641, a 48.7% increase from the previous month. This is the second highest figure since statistics began, following 77,117 transactions in June 2013. This contrasts with the sales volumes in the Seoul metropolitan area and Seoul itself, which decreased by 1.8% and 5.1%, respectively, compared to the previous month.

The government’s designation of virtually the entire Seoul metropolitan area as a regulated zone through the June 17 measures appears to have caused a balloon effect, driving buying demand to the provinces. In fact, during the peak transaction months of June and July this year, provincial transaction volumes were about 10,000 fewer than those in the metropolitan area. However, in September, provincial transactions (43,839) surpassed metropolitan transactions (38,089) for the first time, and last month the gap widened to about 35,000 transactions.

On the 17th of this month, Ulsan, where some areas were designated as adjusted target zones, recorded 4,819 transactions last month, a 105% increase from 2,345 transactions the previous month. On the same day, Seongsan-gu in Changwon City, Gyeongnam, also designated as an adjusted target zone, saw a 158% increase in transactions compared to the previous month. Busan’s transactions nearly doubled to 19,588 last month from 10,024 the previous month.

Yoon Jihae, Chief Researcher at Real Estate 114, analyzed, "As the price increase in the metropolitan area has been steep, a 'matching' phenomenon seems to have appeared centered on provincial metropolitan cities, which had been subdued." Regarding the designation of these areas as regulated zones, she said, "While it has the effect of tightening liquidity, given that the current market is moving around actual demand, it is difficult for this to lead to a sharp decline in buying. However, since transaction volumes have recently surged and if price increases continue, sellers are likely to reduce the supply of listings, making it unlikely that the increase in transaction volume will continue."

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