Frozen Seoul Apartment Sales Market... Dropping to One-Third as Yeongkkeul Pulls Back

Increased Funding Burden Due to Interest Rate Hikes and Stricter Loan Regulations
9,931 Transactions in the First Half of the Year... One-Third Compared to Last Year

[Image source=Yonhap News]

[Asia Economy Reporter Ryu Taemin] As the housing market freezes, the number of apartment sales in Seoul in the first half of this year recorded the lowest level in 16 years. This is attributed to the increased financial burden on buyers due to consecutive base interest rate hikes and strengthened loan regulations. In particular, the 2030 generation, which accounted for a large portion of the housing market last year, appears to have turned cautious, causing a sharp decline in transaction volume.

According to the Korea Real Estate Board on the 1st, the number of apartment sales in Seoul in the first half of this year (January to June), based on the reporting date, was 9,931 cases. This is the lowest number recorded for the first half of the year since related statistics began in 2006, representing a decrease of 19,468 cases (66.2%) compared to 29,399 cases in the first half of last year.

By age group, the number of apartment sales by the 2030 generation, who were the 'Younggeuljok' (people who borrowed to the limit, even to the soul) last year, significantly decreased. In the first half of last year, their apartment sales in Seoul were 12,179 cases, accounting for 41.4% of the total transaction volume. However, this year, as their financial capacity decreased due to strengthened loan regulations, their sales transactions dropped to 3,562 cases, accounting for 35.8% of the total volume.

Transaction volume also sharply declined in the 'No·Do·Gang' (Nowon, Dobong, Gangbuk) area, where Younggeul demand was heavily concentrated. In the first half of last year, apartment sales in this area totaled 4,931 cases, but this year it was only 1,000 cases, a significant decrease of 3,931 cases (79.7%). Nowon-gu, which had the highest transaction volume, dropped from 2,909 to 610 cases, followed by Dobong (1,369 → 261 cases) and Gangbuk (653 → 129 cases).

The demand for a 'smart single home' in the Gangnam 4 districts (Gangnam, Seocho, Songpa, Gangdong) also seems to be slowing. The total number of apartment sales in these areas in the first half of last year was 5,988 cases, but this year it fell to 2,737 cases, effectively halving the transaction volume. Gangnam-gu (1,719 → 1,136 cases) and Seocho-gu (1,582 → 800 cases), where ultra-high-priced apartments are concentrated, saw smaller decreases, but Songpa (1,428 → 431 cases) and Gangdong (1,259 → 370 cases) experienced about a 70% drop in transaction volume.

This transaction cliff is interpreted as the entire housing market slowing down due to the growing perception that apartment prices have peaked. Additionally, loan regulations such as the Debt Service Ratio (DSR) have been strengthened this year, and the base interest rate has been consecutively raised, increasing the financial burden on buyers. In particular, the young generation, which accounted for a large portion of last year's housing market transactions, appears to have turned cautious, causing a sharp decline in transaction volume.

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