Even with added brokerage fees and discounted house prices... 'No one wants to buy'

Seoul Apartment Sales Supply-Demand Index 87.3
Last December's Transaction Volume Also Record Low

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[Asia Economy Reporters Minyoung Kim, Dongpyo Kim, Seoyul Hwang] A homeowner who placed scissors in the shoe rack, relying on the superstition that it helps sell the house well. A seller who spent tens of millions of won on remodeling and is waiting for a new owner. However, no one is coming to view the house. Mr. A, a temporary two-home owner, listed his 59㎡ (24-pyeong) apartment in Dongjak-gu with a brokerage office last October, but there has been no response. He must sell the house by April, when the one-year capital gains tax exemption benefit ends. In desperation, he lowered the house price by 10 million won and offered a 2.5 million won incentive to the brokerage office.

As the real estate market shifts to favor buyers, various scenes of sellers desperately trying to sell their homes for various reasons are being witnessed on site. Most sellers and buyers are holding out, waiting for the presidential election, but some impatient homeowners are lowering prices or offering "bait," leading apartment prices to a slight decline.

The stronger selling trend in the market is also confirmed by statistics. According to the Korea Real Estate Board on the 25th, the Seoul apartment sales supply-demand index this week was 87.3, the lowest in 2 years and 7 months. A figure below 100 means there are more sellers than buyers. However, transactions are barely happening. In December last year, the number of apartment transactions in Seoul was 1,124, also a record low.

Mr. B, who even used scissors to try to sell his existing apartment, must complete the transaction by May to pay the balance on his newly purchased home. He decided to follow advice from real estate communities that nothing leaves a better impression on visitors than the smell of bread and coffee. A local real estate agent said, "Even after full remodeling and listing as a quick sale, it doesn't sell. Usually, quick sales are absorbed within a week, but now you have to wait about a month leisurely."

The most certain method is to lower the price. A real estate agent in Daechi-dong, Gangnam-gu, where only four transactions occurred last year, lamented, "There are no inquiries even for listings priced 190 million won lower than the previous transaction."

In Gangnam, where high-end apartments are concentrated, quick sales are more common in smaller units than large ones. A real estate agent in Samseong-dong, Gangnam-gu, said, "Unlike owners of large units who sorted out early due to tax burdens, most listings are from small unit owners who were unprepared."

According to data submitted by the Ministry of Land, Infrastructure and Transport to Kim Hoe-jae, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party, the proportion of falling apartment transactions in Seoul in January was 52.1%. Although slightly reduced from 53.0% in December last year, the proportion of falling transactions has exceeded half for two consecutive months.

The market believes the current buyer-favored market will inevitably continue for some time. Jae-hyun Jang, head of research at RealToday, said, "The transaction freeze in the housing market seems likely to continue throughout this year," adding, "Loan regulations are a problem, but the apartment prices themselves are so high that it is difficult for actual demand buyers to access."

Defining the current market situation as a transaction freeze also means there is insufficient basis for a 'trend judgment' on whether prices are falling or rising. Jin-hyung Seo, president of the Korea Real Estate Society, said, "The current reduction in market price increases may be a temporary error due to too small a statistical sample," and added, "We need to reanalyze the situation after the presidential and local elections when transaction volumes recover."

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