"Stimulus Package Effect"... Last Year's Housing Sales Transaction Amount Surpasses 300 Trillion Won

Total Nationwide Housing Sales Transactions Amount to 360.8 Trillion KRW
Total Apartment Sales Transactions Amount to 282.2 Trillion KRW
"Despite the Spread of COVID-19, the Housing Market Boomed Due to Interest Rate Cuts and Other Factors"

The biggest issue of 2020 was undoubtedly the real estate frenzy. Despite the government's bold promises to control housing prices no matter what, apartment prices soared to unprecedented heights, striking a blow to the hearts of ordinary citizens without homes. The apartment nightscape filling Seoul feels bitterly poignant. I hope the real estate market stabilizes in the new year of 2021. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Onyu Lim] The total value of housing sales transactions surpassed 300 trillion won last year. Analysts attribute this boom in the housing market to economic stimulus measures such as interest rate cuts implemented in response to the spread of the novel coronavirus disease (COVID-19).

According to Zigbang on the 11th, the total nationwide housing sales transaction amount last year (provisional figure as of January 7) reached 360.8 trillion won. This is the highest amount since statistics began in 2006. Compared to 246.2 trillion won the previous year, it increased by more than 110 trillion won, and it also exceeded the previous record of 262.8 trillion won in 2015 by over 90 trillion won.

Last year, the total apartment sales transaction amount was 282.2 trillion won, surpassing the total sales transaction amount of all other housing types combined in previous years. Sales of multi-family and row houses amounted to 35.4 trillion won, and detached and multi-household houses accounted for 43.2 trillion won. By housing type, there were 801,348 apartment transactions, 175,736 multi-family and row house transactions, and 98,027 detached and multi-household house transactions.

By region, the total housing sales transaction amount in the Seoul metropolitan area last year was 227.8 trillion won, surpassing 200 trillion won for the first time. By type, apartments accounted for 176.1 trillion won, multi-family and row houses 29.4 trillion won, and detached and multi-household houses 22.2 trillion won. Both apartments and multi-family/row houses set new records for highest transaction amounts.

The total housing sales transaction amount in provincial areas was 133.1 trillion won, exceeding 100 trillion won for the first time. This is 38.4 trillion won more than the previous highest transaction amount of 94.7 trillion won in 2015. By housing type, apartments accounted for 106.2 trillion won, multi-family and row houses 6 trillion won, and detached and multi-household houses 21 trillion won. Apartments and multi-family/row houses recorded their highest total sales transaction amounts ever.

The region with the highest total housing sales transaction amount was Gyeonggi-do, with transactions totaling 110.69 trillion won. This is the first time a single city or province has recorded over 100 trillion won since statistics began in 2006. Seoul recorded 92.46 trillion won, an increase of 12.24 trillion won compared to 2019. Among provincial areas, Busan had the highest total sales transaction amount at 28.13 trillion won, increasing by 14.2 trillion won from 13.93 trillion won in 2019. Sejong, which recorded the highest sales price increase rate (37.1% based on Korea Real Estate Board’s comprehensive housing type index), saw an increase of 1.54 trillion won compared to 2019, reaching 3.8 trillion won.

As of the third quarter last year, the total housing sales transaction amount was 18.4% of GDP. If this trend continued until the end of last year, it is expected to have set an all-time high. This is 2.6 percentage points higher than the previous record of 15.8% in 2015. The growth in housing market transactions has outpaced economic growth.

Ham Young-jin, head of Zigbang Big Data Lab, said, "At the beginning of last year, with the government’s demand suppression policies and the unexpected COVID-19 outbreak, it was anticipated that the housing sales market would not easily enter a boom period. However, as part of economic stimulus measures due to COVID-19, including interest rate cuts, the housing sales market instead experienced a boom." He explained that the abundant liquidity in the market flowed into the housing market as a result.

Zigbang expects that ongoing stimulus measures to alleviate economic recession and the resulting abundant liquidity flowing into asset markets will continue to stimulate the housing sales market this year. Policy-wise, various measures to stabilize prices such as demand regulations will be implemented alongside continuous supply expansion measures to stabilize the housing rental market. Ham projected, "Given the significant strengthening of housing-related taxation policies such as property taxes and the expansion of regulated areas including adjustment target areas, demand shifting to non-regulated areas will be somewhat limited."

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