Seoul Apartment Transactions Hit a Wall

Notable Decrease in Transaction Volume in Top 5 Areas Including Guro and Gangdong Districts

September Apartment Sales in Nowon District at 221 Units, Lowest in 2 Years and 6 Months

[Asia Economy Reporter Kim Min-young] The transaction freeze continues not only in Gangnam, Seoul but also in the outer areas where mid-to-low priced apartments are located. This is because the average sale price of apartments in Seoul has surpassed 1.2 billion KRW, and government loan regulations have tightened, blocking buyers' access to financing. However, experts say it remains uncertain whether the transaction stagnation will lead to a drop in housing prices, as supply contraction and instability in the jeonse (long-term lease) market persist.

According to the Seoul Real Estate Information Plaza on the 4th, the number of apartment sales reported in Gangnam District in September, after the reporting deadline, totaled 146 units, marking the lowest since April 2020 (158 units), except for June (168 units) when capital gains tax surcharges were an issue. Although the number of sales in October, with the reporting period still open, increased slightly to 180 units, considering that 128 of these were sales of LH Gangnam Hillstate units converted from rental to sale, the number of sales reported in Gangnam District by that day was only 53 units.

Along with Gangnam District, the top five districts in Seoul by transaction volume?Guro, Gangdong, Nowon, and Gwanak?also saw a noticeable decline in transactions. Gangdong District, home to the massive 4,932-unit complex Godeok Gracious, recorded 123 apartment sales in September, the lowest since April 2019 (129 units).

The situation is similar in Nowon, Gwanak, and Guro, where many mid-to-low priced apartments are located. Prices have surged due to mid-to-low priced apartments catching up to high-priced apartment levels, and the government's strengthened loan policies have created an environment where buying is difficult even for those who want to.

In September, Nowon District's apartment sales were 221 units, the lowest in two and a half years. Newlywed couple Mr. A, preparing for marriage, said, "Two years ago, the sale price for a 17-pyeong unit in Sangye Jugong Complex 6 was around 400 million KRW, but now the actual transaction price is close to 700 million KRW, so I can't even get a home mortgage loan (Bogeumjari Loan)." He added, "With the Debt Service Ratio (DSR) regulations, even credit loans are difficult to obtain, so I might have to give up on buying a home."

Gwanak District's transaction volume has also declined for two consecutive months after peaking in July. In September, Gwanak District recorded 107 apartment sales, the lowest since April 2019 (91 units). Both Nowon and Gwanak districts saw their average apartment sale price per 3.3㎡ exceed 30 million KRW for the first time this year.

Even in Guro District, where prices are relatively affordable, apartment sales in September dropped to 157 units, showing a clear downward trend. The apartment transaction volume in Guro, which averaged 200 to 300 units earlier this year, fell to the 100-unit range starting in September, returning to the level seen in March 2019 (123 units).

Ye Kyung-hee, Senior Researcher at Real Estate 114, predicted, "With strengthened household debt management measures, it will remain difficult to buy apartments in Seoul, so the wait-and-see trend is expected to continue." However, she added, "Since homeowners are not drastically lowering their asking prices immediately, the current transaction slump will not lead to a price drop right away."

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