"Only Immediate Sales Accepted"…The Real Estate Market Without 'Yeongkkeul' Buyers

Housing Sales Transactions Fell 42.5% in November Last Year
Regional Market Contraction Deepens... "Adjustment Expected for the Time Being"
"Many Used All-In Last Year, but Buyers Are Cautious Recently"

As high housing prices and tightened loan regulations dampen home buying demand, a nationwide "transaction cliff" is intensifying. While housing sales volumes in the Seoul metropolitan area have dropped by more than 30% over the past year, transactions in provincial areas have plummeted by nearly half. The transaction slump is progressing more sharply in outlying regions such as provinces, where demand is relatively weak. The transaction freeze, triggered by loan restrictions, has worsened since the start of the new year, deepening the sighs of frontline real estate agents and sellers.

"No transactions unless it's a quick sale"... The market is frozen solid

According to the real estate industry on the 4th, severe transaction stagnation approaching levels seen during the financial crisis continues not only in Seoul and the metropolitan area but also in major provincial regions. Reviewing the housing statistics released by the Ministry of Land, Infrastructure and Transport on the same day, nationwide housing sales in November last year totaled 67,159 cases, a 42.5% decrease compared to one year earlier. Compared to the average transaction volume over the past five years, it also dropped by 25.7%.

This freeze in transactions is interpreted as a result of excessively high home prices in recent years, a sharp contraction in buying demand due to loan regulations, and the spread of expectations for falling housing prices. A representative from real estate agency A in Ulsan said, "In downtown Ulsan, transactions simply do not happen unless it is a quick sale," adding, "There are no clear positive factors, so the transaction cliff seems likely to continue for the time being."

In particular, frontline real estate agents are voicing complaints that their incomes are sharply declining as not only sales but also jeonse (long-term lease) transactions have rapidly decreased. According to the Ministry of Land, Infrastructure and Transport, apartment sales in November last year were 41,141 cases, down 54.1% from the previous year. A representative from the Korea Association of Realtors said, "The decrease in transaction volume is a direct blow to real estate agents."

Provinces are more at risk than the metropolitan area

The transaction cliff is even more severe in provinces where the real demand base is weak. Since 2020, a speculative boom in low-priced apartments in provinces led to many sales transactions centered on mid- to low-priced complexes, but since the government's loan regulations took full effect last year, buying demand has sharply declined. Because provinces have a smaller proportion of real demand compared to Seoul and the metropolitan area, there is concern that problems like "empty jeonse" (Kkangtong Jeonse) could worsen during a housing price decline.

Especially as the government has announced it will maintain regulatory zones in provinces for the time being, transaction contraction is expected to deepen further. The Ministry of Land, Infrastructure and Transport recently decided to maintain the adjusted target areas in provincial regions such as Daegu, where housing prices have stalled, stating, "Considering still low interest rates and abundant liquidity in the market, easing regulations is not appropriate."

Shaky Nowon, Dobong, Gangbuk... Hesitation in buying a home

In Seoul, apartment sales transactions in the Nowon, Dobong, and Gangbuk districts (No-Do-Gang), where small- and medium-sized apartments are concentrated, have dropped by more than half. According to the Seoul Real Estate Comprehensive Plaza, apartment transactions in Gangbuk-gu in December last year were only 7 cases, just 4.2% of the 163 cases one year earlier. It is analyzed that the Gangbuk area is more vulnerable to loan regulations and interest rate hikes because homebuyers there tend to rely heavily on loans.

Kwon Il, head of the research team at Real Estate Info, said, "Last year, many people tried to gather funds by any means to buy a house, but recently buyers seem to have become more cautious considering prices and loans," adding, "Since the presidential election has not yet concluded, the wait-and-see trend is likely to continue, so adjustment seems inevitable for the time being."

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