Housing Market Ice Age Thawing... Fluctuations Amid Expectations for Deregulation

March Nationwide Sales Volume Increased by 23.8%

The nationwide housing sales volume in March increased by about 24% compared to the previous month. This is interpreted as a recovery in housing transactions due to expectations of deregulation in reconstruction and taxation by the new government following the presidential election.

According to the Ministry of Land, Infrastructure and Transport on the 29th, the nationwide housing sales volume in March (based on the reporting date) totaled 53,461 cases, showing a 23.8% increase compared to the previous month (44,179 cases).

The transaction freeze, which had deepened due to concerns that housing prices had peaked and the added variable of the presidential election, is gradually easing. January’s transaction volume (41,709 cases) recorded a -22.4% decrease compared to the previous month, but in February it turned to an increase with +3.5%. Then in March, it showed a significant rise of over 20%.

By region, the metropolitan area (20,109 cases) showed a 24.5% increase compared to the previous month, surpassing the increase in other regions (23.4%). In Seoul and Gyeonggi Province, buying demand has somewhat revived due to expectations of real estate deregulation immediately after the presidential election, and some areas have also experienced rapid price increases.

Based on data from the Seoul Real Estate Information Plaza, the apartment transaction volume in Seoul in March reached a total of 1,401 cases as of the 27th, marking the highest figure in five months since October last year (2,197 cases). Some high-priced apartments in Gangnam and Seocho districts and reconstruction promotion complexes saw record-high transactions.

Gyeonggi Province also reported 5,776 transactions last month (as of the 27th, according to the Gyeonggi Real Estate Portal), recording the highest transaction volume in five months since October last year (7,892 cases). House prices in Bundang and Ilsan showed strength due to news of deregulation in reconstruction and remodeling of first-generation new towns.

However, the March transaction volume decreased by 47.6% compared to the same month last year (102,109 cases), and the absolute transaction volume remains low. Considering interest rate hikes and persistent regulatory risks, the prevailing assessment is that it is difficult to expect a transaction boom like last year.

In particular, the market is extremely sensitive and fluctuates greatly depending on news of the new government’s real estate policies. The Seoul apartment sales supply-demand index announced by the Korea Real Estate Board this week recorded 90.5, halting its seven-week consecutive rise. The lower the index is below the baseline (100), the more sellers there are compared to buyers. Analysts suggest that buyers have turned cautious due to the presidential transition committee’s moves to slow down deregulation.

Ko Jun-seok, CEO of J.Edu Investment Advisory, said, "Transaction volume will also change depending on the new government’s pace of deregulation," adding, "However, since it is difficult for new buyers to enter the market at the current peak housing prices, the strength and scope of future loan regulation easing will be the key variables determining transaction volume."

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