Housing Market Sees Disappearance of 'Quick Sales' Amid Successive Deregulations... 'Transaction Cliff Deepens'

[Asia Economy Reporter Cha Wanyong] The government is encouraging the revitalization of the real estate market by significantly easing real estate regulations, but the market response remains lukewarm. While the number of urgent sale properties is decreasing mainly in Seoul and some areas of the metropolitan area, slowing the decline in transaction prices, concerns are emerging in the market that the transaction freeze may deepen further, potentially worsening the real estate market slump.

View of apartment complexes in Seoul city from Seoul Sky, the observation deck of Lotte World Tower in Songpa-gu, Seoul. [Image source=Yonhap News]

According to the Korea Real Estate Board's 'Weekly Apartment Price Trend' on the 13th, the apartment sale price in Seoul for the second week of this month (surveyed on the 9th) fell by 0.45%, showing a slower decline compared to last week (-0.67%). After halting the record-breaking decline last week, the drop narrowed for the first time in 8 months (35 weeks), and the decline narrowed for two consecutive weeks due to expectations following the lifting of regulation zones.

Apartment prices in the metropolitan area also fell less, from -0.81% last week to -0.64% this week, marking two consecutive weeks of reduced decline. Areas released from regulation zones such as Gwangmyeong (-1.26%), Gwacheon (-0.91%), Seongnam Sujeong (-1.13%) and Bundang District (-0.46%), and Hanam (-0.82%) continued to show weakness, but the rate of decline eased compared to last week.

Some interpret this as a slowdown in the price decline due to expectations from the tax and loan regulation relaxations for multi-homeowners at the end of last year and the comprehensive deregulation measures announced on the 3rd of this month. Some experts even argue a bottoming theory, suggesting the real estate market has hit bottom and is entering an upward trend.

However, the market evaluation was different. According to real estate agents met on site, after the government's deregulation announcements, homeowners withdrew urgent sale listings, causing even the limited transactions to disappear. They unanimously said the transaction freeze has intensified.

A representative of a real estate agency in Ahyeon-dong, Mapo-gu, Seoul said, "Since the announcement of multi-homeowner regulation easing at the end of last year, not a single transaction has been completed," adding, "Homeowners raised prices on urgent sale properties, freezing transactions."

A real estate agency official in Changcheon-dong, Seodaemun-gu, Seoul, said, "Recently, homeowners have raised prices on urgent sale listings by tens of millions of won," and added, "Sometimes people come to see houses, but they just leave after seeing the prices." He continued, "If the transaction freeze prolongs, urgent sale properties will inevitably reappear. In that case, the government's successive deregulation policies will become useless, and the market shock will inevitably be greater."

In fact, apartment listings in Seoul increased after the deregulation measures. According to big data company Asil statistics, as of the 12th, the number of apartment listings in Seoul was 51,768, a 5.2% increase compared to 49,198 on the 2nd.

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