House Prices Rise Following Regulations... Surge in Apartment Sales Priced Between 600 Million and 900 Million KRW

Impact of Loan Regulation Easing on Non-Homeowners

The proportion of apartment sales priced between 600 million and 900 million KRW is increasing in Seoul. This is interpreted as a result of increased buying interest in apartments within this price range, following the expansion of the mortgage loan limit benefits for non-homeowners to include homes priced under 900 million KRW.

According to an analysis by Real Estate 114 of the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system statistics, among the 3,182 apartment sales registered in Seoul last month as of the previous day, transactions priced between 600 million and 900 million KRW accounted for 33.5%, or 1,066 cases. This means that more than one in every three sales fell within this price range. The share of transactions in this price bracket rose from 26.6% in April to 28.7% in May, 30.9% in June, and reached 33.5% last month.

The increase in the share of apartment transactions priced between 600 million and 900 million KRW appears to be due to the combined effect of rising housing prices and the government's easing of mortgage loan regulations. Recently, the rapid rise in housing prices in outer areas has sharply reduced the supply of properties priced below 600 million KRW, pushing the buying price range upward. Additionally, starting from the 1st of last month, the loan-to-value (LTV) ratio preferential treatment for non-homeowners applying for mortgage loans was increased by up to 20 percentage points, 10 percentage points higher than before. The price criteria were also relaxed: in speculative and overheated speculation zones, the limit was raised from 600 million KRW to 900 million KRW, and in regulated areas, from 500 million KRW to 800 million KRW.

Some suggest that the government’s plan to raise the capital gains tax exemption threshold for single-homeowners from the current 900 million KRW to 1.2 billion KRW could also lead to an increase in housing transactions priced between 900 million and 1.2 billion KRW. In fact, the share of apartment sales in Seoul priced between 900 million and 1.2 billion KRW has been steadily increasing since April, recording 13.1% in April, 5.1% in May, 17.0% in June, and 17.9% in July.

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