Frozen Housing Market... First Half Transaction Volume Drops Below 100 Trillion Won

Total Housing Sales Transactions in the First Half of the Year 84.9 Trillion
Apartment Sales Decrease by 44% in Just Six Months

Apartment complex in Seoul area (Photo by Yonhap News)

[Asia Economy Reporter Ryu Taemin] Recently, as the real estate market has frozen, the total amount of housing sales transactions has fallen below 100 trillion won. This is interpreted as an effect of a significant decrease in buying demand due to recognition of price peaks and interest rate hikes.

According to comprehensive proptech company Zigbang on the 16th, the total amount of nationwide housing sales transactions in the first half of this year was 84.9 trillion won, a decrease of 46.4 trillion won (35.3%) compared to the second half of last year (131.3 trillion won). This is the first time in three years since the first half of 2019 (84.3 trillion won) that it has fallen below 100 trillion won. Compared to the second half of 2020, which recorded the highest transaction amount on a half-year basis (201.4 trillion won), it decreased by 57.8%, and compared to the second half of last year, it decreased by 35.3%.

The total amount of nationwide apartment sales transactions in the first half of this year was 48.3 trillion won, a decrease of 38 trillion won (44%) compared to the second half of last year (86.3 trillion won). This was the lowest in nine and a half years since the second half of 2012 (44.9 trillion won). Compared to the second half of 2020, when the transaction amount was the highest (152.7 trillion won), it decreased by 104.4 trillion won (68.4%). The reason why the decrease in the total amount of apartment sales transactions increased significantly compared to the entire housing market is interpreted as the transaction slump caused by interest rate hikes having a greater impact on the apartment market.

The total amount of sales transactions for housing other than apartments in the first half of this year was 17.6 trillion won for single-family houses, 13.9 trillion won for row houses and multi-family houses, and 5.2 trillion won for officetels. Compared to the first half of last year, this decreased by 7.4 trillion won (29.5%) for single-family houses, 7.2 trillion won (34.2%) for row houses and multi-family houses, and 1.7 trillion won (25.0%) for officetels. Compared to the second half of last year, it decreased by 3.5 trillion won (16.6%), 3.3 trillion won (19.6%), and 1.5 trillion won (22.6%), respectively.

Although housing other than apartments showed a relatively smaller decrease than apartments, considering the lagging characteristics of the apartment market, there is a prospect that the contraction may intensify further in the second half of this year. In fact, apartments recorded the highest total sales amount in the second half of 2020, but housing other than apartments recorded the highest total sales transaction amount in the first half of last year, one half-year later. It is interpreted that the apartment market led, and then demand spread to the non-apartment market as a balloon effect.

The total amount of housing transactions in the metropolitan area and provinces also decreased sharply in the first half of this year. The total housing transaction amount in the first half was 48.7 trillion won in the metropolitan area and 36.2 trillion won in the provinces, decreasing by 31.7 trillion won (39.4%) and 14.8 trillion won (29%), respectively, compared to the second half of last year. The metropolitan area recorded the lowest in nine years since the first half of 2013, and the provinces recorded the lowest since 2019.

A Zigbang official explained, “In the metropolitan area, the decrease appears relatively large because the rise was steep and the boom lasted long,” adding, “Demand sentiment is rapidly shrinking due to high price levels and worsening external conditions.”

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