Housing Purchase Sentiment Hits All-Time High... Policy Measures Ineffective

Real Estate Agency Sales Supply-Demand Index at 117.2... Seller's Market Forming

[Asia Economy Reporter Jo Gang-wook] It has been revealed that apartment buying sentiment in the Seoul metropolitan area has reached an all-time high. Despite the government releasing various real estate measures, the simultaneous rise in both sales and jeonse/monthly rent prices has not easily calmed down, leading to a continued strong desire to purchase homes.

According to the Korea Real Estate Board on the 25th, as of the 18th of this month, the apartment sales supply-demand index in the Seoul metropolitan area recorded 117.2, rising 1.9 points from the previous week (115.3). This is the highest level since the Korea Real Estate Board began related surveys in July 2012. The sales supply-demand index is based on 100, and a value above this indicates that demand exceeds supply. With the Seoul metropolitan area sales supply-demand index soaring to an all-time high, the nationwide index (114.7) also reached its highest level since statistics began.

In the Seoul metropolitan area, Gyeonggi Province (123.1) and Incheon (112.8) recorded their highest values since the survey started. In the case of Gyeonggi, when the government tightened loans on high-priced apartments with the December 16, 2019 measures, sales demand shifted from Seoul to Gyeonggi, pushing the index above 100 in December of the same year. This was the first time in 2 years and 5 months since July 2017.

Since then, although regulations were imposed on overheated areas through the June 17 and July 10, 2021 measures, Gyeonggi maintained a level above 100, and from the first week of October 2021 (107.4) until last week, the upward trend has never faltered. Incheon shows a similar pattern to Gyeonggi. Seoul recorded 109.2, marking the highest level in 5 months since August 3, just before the announcement of the August 4, 2021 supply measures (111.1). Because of this, there is analysis that various government measures are instead stimulating buying sentiment.

As buying demand continues, apartment prices in the Seoul metropolitan area are also soaring. In last week’s Korea Real Estate Board survey, apartment prices in the Seoul metropolitan area rose 0.31% from the previous week, marking the highest rate of increase in 8 years and 8 months since related statistics began.

Apartment buying sentiment is also steadily rising in non-metropolitan areas. Last week, metropolitan cities such as Busan (115.1), Daejeon (116.5), Daegu (120.4), Gwangju (109.5), and Ulsan (116.1), as well as Chungnam (114.7), Chungbuk (108.6), Gyeongnam (104.6), Gyeongbuk (109.1), Jeonnam (106.5), and Jeonbuk (101.3) all exceeded 100.

An official from the Korea Real Estate Board said, "As Seoul house prices have risen significantly and the jeonse shortage has worsened, sales demand is concentrating on more affordable apartments in Gyeonggi and Incheon, forming a seller’s market."

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