January Housing Sales Halved Compared to Last Year... Transaction Cliff Deepens

41,700 Cases, Down 54% Compared to One Year Ago

[Asia Economy Reporter Kangwook Cho] The volume of housing sales transactions in January has been cut in half compared to a year ago. Due to the government's loan regulations and interest rate hikes, liquidity contraction effects are causing a nationwide transaction freeze.

According to the Ministry of Land, Infrastructure and Transport on the 28th, the total number of housing sales nationwide last month was 41,709, which is a 54.0% decrease compared to the same month last year (90,679). This is the lowest transaction volume in 102 months since July 2013. Compared to the previous month (53,774), it decreased by 22.4%.

The housing sales volume began to decline after last September when commercial banks started tightening credit loan limits to 'within the individual's annual income range,' recording about 82,000 transactions. It continued downward with about 75,000 in October, 67,000 in November, and 54,000 in December.

By region, last month Seoul's housing sales volume was 4,831, down 60.6% compared to the same month last year. The metropolitan area including Seoul, Gyeonggi, and Incheon (16,209 transactions) decreased by 65.6%. Compared to the provinces, which decreased by 41.4% (25,500 transactions) during the same period, the metropolitan area's decline was larger.

By housing type, apartments recorded 24,465 transactions, down 19.7% from the previous month and 62.0% from the same month last year. Non-apartment housing had 17,244 transactions, decreasing 26.0% from the previous month and 34.5% from the same month last year. The market views that housing sales demand is shrinking as market interest rates rise following the base rate hikes. Additionally, with the presidential election next month, a wait-and-see sentiment delaying housing transactions is spreading.

Compared to the sales market, the jeonse and wolse (lease and monthly rent) market remains stable. The combined volume of jeonse and wolse transactions (based on reporting dates) from the lease reporting system and fixed-date reporting system totaled 204,497 last month. This is a 5.1% decrease compared to the previous month but a 13.9% increase compared to the same month last year. The proportion of monthly rent in jeonse and wolse transactions was 45.6%, up 4.6 percentage points from 41.0% in the same period last year. Compared to the recent 5-year average (41.1%), it increased by 4.5 percentage points.

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