"Regulation Lift" Yoon Effect... Apartment Transaction Freeze Slowly Thaws

Seoul Sales Supply-Demand Index Rises for 7 Consecutive Weeks to 91.4
Buying Momentum Green Lighted... Sales Volume Hits 4-Month High
Increased Sell and Buy Inquiries Amid Expectations for Tax Reform and Safety Inspection Easing

[Asia Economy Reporter Jo Gang-wook] Seoul apartment buying sentiment has risen for seven consecutive weeks. The number of apartment sales transactions also recorded the highest level in the past four months, showing signs of escaping the transaction freeze that has persisted since the second half of last year. This is interpreted as a result of growing expectations for the real estate policies to be promoted by the new government. Following the presidential election, the so-called ‘Yoon Seok-yeol effect’ is reversing the mood in the Seoul apartment market back to ‘buying.’

According to the Korea Real Estate Board on the 22nd, the Seoul apartment sales supply-demand index for the third week of April (as of the 18th) was 91.4. This is an increase of 0.4 points from the previous week. The supply-demand index quantifies the ratio of buyers to sellers, with a baseline of 100 or more indicating that demand exceeds supply. The Seoul apartment sales supply-demand index hit a bottom at 86.8 in the survey at the end of February, when the transaction drought was severe, then rose to 87.0 in the survey on March 7, just before the presidential election, and has been rising for seven consecutive weeks. Although sellers still outnumber buyers, this is interpreted as a sign that buying demand is recovering.

The market views this as reflecting expectations for transaction activation and house price increases as discussions on real estate tax reforms, such as easing reconstruction regulations and reducing housing holding taxes, have begun after the presidential election. In fact, in the Gangnam area of Seoul, inquiries for apartment sales and purchases have simultaneously increased following the Presidential Transition Committee’s announcement of a one-year postponement of the capital gains tax surcharge and consideration of easing safety inspections. Additionally, some homeowners are withdrawing listings and raising asking prices, creating a stirring atmosphere in apartment prices. An apartment in Apgujeong-dong, Gangnam-gu, Seoul, Shinhyundai 12th Complex, with an exclusive area of 155㎡ (6th floor), was traded on the 15th for 5.9 billion KRW, setting a new record price. A unit of the same size on the 12th floor was traded for 5.5 billion KRW in April last year, marking a 400 million KRW increase in one year. The sales supply-demand index in the southeastern area, which includes the three Gangnam districts of Gangnam, Seocho, and Songpa, has risen by 10 points since the presidential election until last week, reflecting growing expectations that the new government’s housing policies will benefit the area.

Apartment sales transactions have also surged after the presidential election. According to the Seoul Real Estate Information Plaza, the number of apartment sales in March was 1,325, an increase of more than 60% compared to 810 in February. After seven consecutive months of decline from August last year (4,064 transactions) to February this year, it turned to an increase for the first time in eight months. The number of apartment sales in Seoul in February fell below 1,000 for the first time since monthly statistics began in 2006, hitting bottom, and then rebounded with the presidential election, marking the highest level in the past four months. Considering that the 30-day registration reporting period after contract signing has not yet ended, it is highly likely to surpass the record of 1,361 transactions in November last year. As buying sentiment rises and transactions become active, Seoul apartment prices have stopped falling and have maintained a stable trend for three consecutive weeks.

The situation in Gyeonggi Province is similar. The Gyeonggi sales supply-demand index rose to 92.5 from 92.3 last week. Apartment prices in Bundang and Ilsan new towns, where reconstruction expectations have increased, rose from 0.01% last week to 0.02% this week. Sales also increased significantly. According to the Gyeonggi Real Estate Portal, the number of apartment sales in March currently stands at 5,660, more than 40% higher than 3,852 in February. Apartment sales in Gyeonggi had been declining for six consecutive months from July last year (15,028 transactions) to January this year (3,454 transactions). In the provinces, the index also rose from 96.0 last week to 96.2 this week, and the nationwide apartment sales supply-demand index increased by 0.2 points from 94.2 to 94.4.

However, there are also opinions that it is premature to see this as a clear signal of a full recovery in buying demand, as the Transition Committee recently hinted at slowing down the pace of deregulation. Kyunghee Yeo, chief researcher at Real Estate R114, said, "Until actual confirmed policies are announced after the new government takes office, both buyers and sellers are likely to continue to observe policy changes and adjust their buying timing."

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